MPs question ex-NLC boss Muhammad Swazuri in Sh12bn SGR land probe

Dr Muhammad Swazuri, former chairman of the National Land Commission (NLC), was Friday hard-pressed to explain why he irregularly directed Kenya Railways Corporation (KRC) to pay Sh12.1 billion directly from its accounts in land acquisition.

While appearing before the Public Accounts Committee (PAC) of the National Assembly, Dr Swazuri found the ground slippery after he failed to quote the law he used to give the direction.

The NLC was required to compulsorily acquire the land on behalf of KRC for the Standard Gauge Railway (SGR) as captured by Auditor-General Nancy Gathungu in a special audit on the NLC accounts for financial years 2014/15 to 2016/17.

Instead, Dr Swazuri decided to write to the KRC directing that it procure the land directly.

This left Ugunja MP Opiyo Wandayi, who chairs the committee and Garissa Township Aden Duale, with a charge of dereliction of duty on the NLC, then chaired by Dr Swazuri.

“This is an abscondment of duty and from where we sit, it was not for nothing. It was a conspiracy between NLC and KRC to circumvent the law to meet an end that was not in public interest,” Mr Wandayi said.

“The onus is on you to convince us to think otherwise.”

To compound the situation further, suspended NLC Chief Executive Officer Tom Chavangi told the watchdog committee that so powerful were the commissioners that he was made to rubber stamp their decisions.

“Unique situation”

In his October 6, 2014 letter to KRC managing director, Dr Swazuri delegated the commission’s compulsory acquisition role on behalf of the government entities.

“Due to the urgency of the project, the commission hereby delegates the role of dispensing payments to Kenya Railways Corporation under direct supervision,” Dr Swazuri said in the letter.

“You will be expected to urgently provide for demolition and site clearance of debris at Sh210.13 million. Other subsequent costs will be submitted in due course,” he added.

This is contrary to section 111 (1A) of the Land Act of 2012, which requires the acquiring entity (NLC) to have compensation funds, including survey and registration fees as well as any costs, deposited in its accounts first before the acquisition is undertaken.

Mr Duale noted that it was the first time an acquiring entity was being told to pay directly from its accounts.

“It is a very unique situation. What incapacity did you have to allow such?” posed Mr Duale.

But Dr Swazuri told the committee that the commission sitting at the plenary made a decision for him to write to the KRC.

“The commission sat and realised that it had no staff to do the job,” Dr Swazuri said. “That is why we decided that the KRC does the acquisition.”

The former NLC chairman also told the committee that the decision was on the advice of the NLC sub-committee on land acquisition and compensation, chaired by Dr Tomik Konyimbi.

However, in what turned out to be a circus of sorts, Dr Konyimbi told the committee that he could not remember making such a decision.

“I cannot confirm this,” he said.

Dr Konyimbi was, however, silenced after he claimed the law allowed Mr Swazuri to use the services of national and county staff to “fill a void if it would enhance the work of the commission”.

He did not quote the relevant sections of the law to back his argument. 

No minutes

But even as he made the claim that the board approved the expenditure, Dr Swazuri failed to produce the minutes to prove his claims.

“You must produce the minutes of the sub-committee that you claim advised the commission on the payment, the minutes of the commission sitting at the plenary and the resolution of the plenary that authorised Dr Swazuri to write the letter,” Mr Duale said.

So powerful was Dr Konyimbi’s committee that Mr Chavangi said he acted on its decisions without a resolution of the commission plenary.

NLC acting CEO Kabale Tache could also not confirm whether such minutes exist at the commission.

“Nothing was handed to me but I will go through the minute book,” Ms Tache told the MPs.

The lawmakers also put Dr Swazuri on the spot for presiding over a commission that “did not care” to maintain a database or register of all public land acquired.

The lack of these crucial documents may have led to the loss of public funds.

Valuation reports

Other than failing to maintain a database, NLC also failed to conduct searches at the Lands Registry to confirm that parcels of land acquired were not public land and that they had been lawfully acquired.

To further compound the situation, the audit casts doubts on the prudence of Sh7.7 billion spent on land compensation.

The audit reports that the commission heavily relied on valuation compensation schedules that were either not dated, not signed or not made available in some cases, and payments made without evidence of valuation reports.

Mr Duale noted that this revelation raises doubts on the reliability of the payments made by the commission.  

“This is not how a commission, with the mandate to acquire land on behalf of government agencies, should operate,” the Garissa Township MP noted.

Suspended NLC director of valuation Salome Munubi said, however, that the reports were signed.

Only gazetted valuers are required to sign valuation reports before payments can be made.

Interestingly, the acquired land was not put to immediate use.

Unapproved expense

Dr Swazuri is also in hot soup for approving an expenditure of Sh226.2 million in interest earned from monthly cash deposits by NLC, without the approval of the National Treasury or appropriation by the National Assembly.

This is contrary to the Public Finance (PFM) Management Act.

Section 68 (1) of the PFM Act requires accounting officers in public offices to ensure public resources are used in a lawful manner.

The audit notes that Sh92.16 million was earned in interest during the 2015/16 financial year and Sh134.08 million for financial year 2016/17.

On Friday, the Wandayi-led committee heard that the NLC’s interest earning account was not approved by the National Treasury before it was opened, as required by the law.

“It is not a government policy to open accounts that earn interest. They (NLC) should say whether they got the authority or approval from the National Treasury,” the Treasury official said.

“These funds had not been budgeted for and there was no approval given by the National Treasury or Parliament for the funds to be utilised for this purpose,” the report notes.

The special audit raises fears that such irregularities in the management of these compensations could be a barrier in the realisation of value for money, and pose a potential risk to the attainment of Kenya Vision 2030 flagship projects.

NLC’s failure to conduct searches at the Lands Registry, to confirm that the parcels of land acquired were not public land and had been lawfully acquired, could see the government lose up to Sh9.57 billion.

The audit report reveals that in such circumstances of poor record keeping and inadequate controls at the commission, it was impossible to validate instances of over-compensation, double compensation in some instances, or false claims of compensation.

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