The Public Investment Committee on Commercial Affairs and Energy in a report dated December 6, called for the cancellation of the sale of a 337-acre land belonging to East Africa Portland Cement (EAPC).
In its recommendations to the Parliament, the Committee noted that the government was set to lose over Ksh233 million due to the undervaluation of the prime property.
Investigations revealed that in 2012, EAPC entered into an agreement with a real estate company to sell the 337-acre piece of land at Ksh2.2 million per acre.
This was contrary to the valuation that had shown that the piece of land was worth Ksh5.2 million per acre.
Members of Parliament attending President William Ruto’s State of Nation address on November 9, 2023.
When the real estate company failed to provide acceptable bank security within the stipulated time, it gave EAPC a window to re-negotiate the price to Ksh4.5 million per acre.
The Parliamentary committee found out that despite the new pricing, the State was bound to lose Ksh233 million.
Despite the renegotiated terms, the real estate company further defaulted on the deal and in January 2019 proposed to purchase the land in two phases split at 160 and 177 acres.
EAPC later rejected the offer after it was realised that during the floating of the two-phase purchase model, the real estate company had included unacceptable terms of conditions.
“(The real estate company) later included other conditions which the company found extraneous, such as construction of a wall and clearance of squatters and maintaining the cleared state of land,” the report read in part.
After the disagreement, the real estate company revised its offer once again and reduced the acreage to be purchased from 337 acres to 87 acres.
The two parties decided on an out-of-court settlement and in April 2022, EAPC and the company agreed on the sale of 100 acres.
In the never-ending battle, the real estate on June 5, 2023, rescinded the sale agreement dated April 14, 2022, sending the case back to court.
“The Committee recommends that EAPC PLC register the consent in court for the cancellation of the sale agreement between EAPC PLC and the real estate company,” it was ordered.
President William Ruto had earlier warned tycoons of using the judicial system to exploit State-owned entities.
The President had noted that unscrupulous businessmen had perfected the art of dragging court cases for years making it impossible for parastatals to carry out its development agenda.
A photo collage of the East African Portland Cement (EAPC) and houses being demolished in Mavoko on October 13, 2023
EAPC / Wavinya Ndeti