MPs want projects frozen on land bills

Economy

MPs want projects frozen on land bills

Monday March 11 2024

The National Treasury building in Nairobi. PHOTO | DENNIS ONSONGO | NMG

The Budget and Appropriation Committee of the National Assembly wants all government projects with land pending bills for land compensation frozen to curb a build of unsustainable debt.

The committee has tasked Treasury Cabinet Secretary (CS) Njuguna Ndung’u to expedite the settlement of pending bills for land acquired for past projects before taking on new ones.

“In the view of delayed compensation for land acquired from individuals by the government for various projects, the CS for National Treasury and Economic Planning to prioritise payment for land compensation in the financial year 2024/25 estimates before they are submitted to the National Assembly. Going forward, no government project should commence before the owners of the land are compensated,” the budget committee stated in a report considering the 2024 budget estimates.

Read: NLC moves to extend public land mandate with new Bill

According to data from the exchequer, pending bills relating to project land compensation stood at Sh42.5 billion as of the end of June last year with the arrears relating to the principal amount due to parcel holders.

Compulsory land acquisition for projects is usually undertaken by the National Land Commission (NLC) which at present possesses the power to evaluate and value land for compensation.

Entities acquiring land for projects which are mostly public institutions are usually required to deposit compensation money with the NLC which then pays for the land on behalf of the acquiring bodies.

The NLC lists road agencies including Kenya National Highways Authority and the Kenya Urban Roads Authority as the biggest culprits of unpaid land compensation bills.

The non-payment of land compensation bills sits against the principles of the Land Acquisition Act which calls for prompt payments to holders of parcels acquired for government projects.

“Where land is acquired compulsorily, full compensation shall be paid promptly to all persons interested in the land,” reads part of the Act.

The directive by MPs, if effected, is expected to affect the implementation of new infrastructure projects requiring land acquisition as a prerequisite.

Compulsory land acquisition has been crucial for the delivery of projects under the current medium-term plan.

For instance, the Treasury states that compulsory land acquisition was necessary in the development of 60 infrastructural public projects in the agriculture, rural, and urban development sectors between the 2020/21 and the 2022/23 financial years.

Land acquisition is expected to remain at the heart of the implementation of future projects with the exchequer for instance outlining plans to establish a settlement fund to anchor rural housing and settlement.

“To support rural housing and settlement, the government will establish a settlement fund similar to the one that was used to acquire land from settler farmers after independence. The land purchased by the scheme will be subject to land use planning where beneficiaries will own transferable residential plots in planned settlement to stop land fragmentation,” Treasury says in its 2024 Budget Policy Statement.

Project-linked land compensation pending bills represent the highest stock of national government arrears after overdue payments to contractors who were owed Sh159 billion as of the end of June last year.

Data by the Budget Committee shows that all pending bills for the construction of roads and other infrastructural projects, including land compensation, total Sh162 billion.

“The committee raised concerns over the pending bills on road contracts including land compensation for individuals and relocation of public amenities amounted to Sh162.4 billion mainly due to budgetary deficiency,” the Budget committee noted.

Read: Road agencies owe evicted landowners Sh37 billion

“There is a need to prioritise compensation of individuals whose properties have been acquired by the government to pave the way for roads and other infrastructural developments,” it added.

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