·         Thursday, 31st March, 2011
·         The House met at 2.30 p.m.

·         Amos Kimunya (The Minister for Transport) 

Mr. Speaker, Sir, as requested by the Member for Makadara, Mr. Mbuvi, I wish to make the following Statement on the sale of Kenya Railways houses in South B. Mr. Speaker, Sir, some of the Kenya Railways Corporation (KRC) operations were concession to the Rift Valley Railways (RVR) on 1st November 2006. 

However, various assets were retained by the corporation. Part of the Governments strategy to improve the corporation's financial position included the disposal of some of the non-strategic land and assets by outright lease or sale. In order to implement this strategy, an Inter-Ministerial Committee was formed and they prepared a report in September, 2007. This report made recommendations, including the outright disposal of specific properties, re-development and leasing of others. In addition, the committee recommended sale of some of the properties to staff at preferential rates. The report was then tabled to the board of KRC and recommendations were adopted
·         18 Thursday, March 31, 2011 (P)

·         The KRC the board made recommendations for the disposal of the South B houses in line with the requirements of the Kenya Railways Corporation Act (Cap.397). Consequently, the approval that was sought was granted by both the Ministry of Transport and the Ministry of Finance, pursuant to the provisions of the State Corporations Act which require that approval be given by the two Ministries. 

The Corporation was directed to dispose of the assets at market prices through a competitive process. You may recall that I mentioned that the committee had earlier recommended that the houses be sold to staff at preferential rates. However, when the approval was given, it was conditional to disposal of the assets at market price through a competitive process. Mr. Speaker, Sir, the sale of the 38 houses or plots in South B was advertised in the local Press pursuant to the directive and over 300 bids were received. The sale was by open tender and interested bidders, including members of RVR and KRC were invited to buy tender documents giving full descriptions, including the developments thereon, of all the properties. 

The properties were valued prior to advertising to determine reserve prices. Mr. Speaker, Sir, the tender process is now complete and names of the would-be purchasers are not known at this point. All the bidders were to obtain a viewing certificate as a mandatory requirement in the tender documents to ensure they familiarize themselves with the property and the developments on them. The tenders were opened on 11th March 2011, in the presence of all the bidders or their representatives and the bids were readout.

 Mr. Speaker, Sir, neither the Ministry nor the Corporation is aware of any inducement having been paid to any person. I request the hon. Member to let myself or any other relevant organization have any evidence in this regard. In addition, no aliens were allowed to participate in the process as all bidders were required to either provide copies of their national identification or certificates of incorporation in the case of companies. Further, the lease termination notices issued to the tenants are in accordance with the individual lease agreements. 

Tenants were given notice in order to give buyers vacant possessions as envisaged in the bid documents and, therefore, no forceful evictions are contemplated. In conclusion, let me say that the entire process of the sale of South B houses is being carried out in accordance with the directions given by the Government following the report of the Inter-Ministerial Committee and it is in tandem with the provisions of the Public Procurement and Disposal Act of 2005 and the Public Procurement and Disposal Regulations of 2006.
·         Mr. Speaker 

Hon. Members, anybody interested in clarifications on this Statement?
·         John Olago Aluoch 

Mr. Speaker, Sir, yesterday, I listened very carefully as the Minister for Lands was explaining how valid title deeds can be transferred on leases that were given to the public corporations. One of the things that the Minister said was that when conditions of the original lease indicated that the leasehold interest cannot be transferred or sold than any public corporation that attempts to make that transfer or sale, however competitive the process is, will be committing an illegality and will be breaching the conditions of the lease. Under these circumstances, could he clarify to the House if the leasehold interests that are being transferred by KRC are subject to the conditions of the original lease that was given to them?
·         Amos Kimunya (19 Thursday, March 31, 2011 (P) The Minister for Transport) 

Mr. Speaker, Sir, KRC is a body corporate with power to own, contract, have properties and dispose of property. It is no different from an individual who has a lease from the Government. The same conditions that apply to anyone who has a lease will apply to any other body corporate. Mr. Speaker, Sir, I know we have gone through this. We have also looked through it. There are different legal interpretations on this matter. But in this particular case, I would like to state that the Inter-Ministerial Committee that was formed in 2007 to look at this specific matter, had representation from the Ministry of Transport, Ministry of Finance, Ministry of Housing, Ministry of Lands, Ministry of Local Government, the Attorney-General’s office, the Inspectorate of State Corporations and the KRC. They looked at this matter and agreed on the way forward on this.
·         Amos Kimunya (19 Thursday, March 31, 2011 (P) The Minister for Transport) 

So, the Ministry for Lands was well represented and the Office of the Attorney-General gave its advice. It was agreed that, that could be done according to the Kenya Railways Act. The Act stipulates how the Corporation’s assets can be disposed of or leased. In the meantime, just for the comfort of hon. Members, and because this matter is going round and round, we have put efforts together to get this matter re-looked at afresh, have a Cabinet Memo that will then guide this process. That way, we can have one voice coming out of the Government through the memo that will have been agreed upon in the Cabinet. So, if you could hold on, we will ensure that we will, at least, have one voice coming out because we both believe we are right.
·         John Olago Aluoch 

On a point of order, Mr. Speaker, Sir. The issue that I have raised has not been addressed by the Minister. The issue was this: If it was a condition in the original lease that the interest would not be transferred, then it is possible that Kenyans who are innocent are being given title deeds which are not worth the paper they are written on. Could the Minister confirm? It is not a question of what the Government will do or what people have agreed on. But has the condition of the lease been changed to allow for transfers of the leasehold interest?
·         Mr. Speaker 

Mr. Minister, maybe, you may want to deal with that one specifically. That is because I understand what the hon. Member is getting at. He has narrowed it down to the conditions on which the lease is granted. If one of those conditions is that the interest is not transferable, then, obviously, any transfer is illegal. So, just address yourself to that area.
·         Amos Kimunya (The Minister for Transport) 

Mr. Speaker, Sir, as far as we are concerned with regard to those properties, that matter had been cleared. But before the conclusion of that process, the matter will be looked at afresh. In any case, the transfer process will have to be a joint effort between the Kenya Railways Corporation and the eventual buyers. So, we will have a look at it and if there is a hindrance to that, we will come up with the best way to ensure that nobody gets documents that are doubtful in terms of their legality.


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