Audit finds KPA directors dished out port land illegally

The Kenya Ports Authority yard in Mombasa. KPA directors irregularly approved a private developer’s excision of land in the port’s harbour area, causing the agency multi-million shilling loss. FILE PHOTO | NATION MEDIA GROUP 

By EDWIN MUTAI

In Summary

• Auditor-General Edward Ouko says that the KPA board’s decision to approve construction of a private road through the harbour was in violation of laws that protect port land.
• The report accuses the board of usurping the powers of the Transport minister and the National Land Commission (NLC), who are the only entities with the authority to alter any part of the port area.
• The audit also found that the board had breached the KPA Act, which requires it to protect the port harbour area against any encroachment.
• Despite the NLC writing to the private developer in December 2015 to explain its involvement in the land reclamation, Mr Ouko said the developer went ahead and acquired titles for the parcels.

Kenya Ports Authority (KPA) directors irregularly approved a private developer’s excision of land in the port’s harbour area, causing the agency multi-million shilling loss.

Auditor-General Edward Ouko says in his latest report on the state of the port’s finances that the KPA board’s decision to approve construction of a private road through the harbour in order to create an access road to reclaimed land offshore was in violation of laws that protect port land.

The report accuses the board of usurping the powers of the Transport minister and the National Land Commission (NLC), who are the only entities with the authority to alter any part of the port area, and allowing the private developer to apply for and obtain a separate title for the reclaimed piece of land.

“The reclaimed land formed part of the harbour area, which could only be amended through a gazette notice issued by the minister responsible for Transport and not the authority’s board or management,” the report says.

The audit also found that the board had breached the KPA Act, which requires it to protect the port harbour area against any encroachment.

Mr Ouko says the KPA tariff book pronounces all the tidal waters encircling the Mombasa Island as harbour area, leaving no doubts as to the extent of protection required.

“It was noted that a private developer reclaimed part of the title waters encircling Mombasa Island next to the Kenya Ports Authority offices,” Mr Ouko says in his latest audit of KPA’s finances for the year to June 2015.

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The audit found that despite the authority inquiring from the developer why they were reclaiming land that had not been communicated to the authority in 2010, it did not provide evidence that the reclamation was sanctioned by the National Land Commission (NLC) or change of use for the harbour area by the minister as required by Section 34 of the KPA Act.

Land reclamation

Despite the NLC writing to the private developer in December 2015 to explain its involvement in the land reclamation, Mr Ouko said the developer went ahead and acquired titles for the parcels.

“The commission requested for a letter of application for an approval to reclaim the land. The commission further ordered immediate stop of development on the subject land LR 4180,3819 and 3823 and its environs until a determination of the matter,” but the developer appeared to have illegally proceeded to excise part of the harbour area and has continued to develop the same against the land commission directives.

“Consequently, we could not confirm the rights to the tidal waters surrounding the Island of Mombasa as part of the authority’s assets and resources as gazetted by the KPA tariff book,” Mr Ouko says in the report.

On the approval of access road, the report says  the authority’s board approved construction of a road linking the reclaimed parcels of land by the same developer to the port through a defined route on parcel MSA/BLOCK 1/691, which was reclaimed through dumping material from the port.

“The road is restricted and privately used by the developer who installed a weighbridge and an office for their use,” he said.

The KPA management told auditors that the developer acquired a title for the reclaimed land on behalf of the authority at the developer’s cost.

“The management did not explain how the developer and under whose instructions, they applied for and acquired the title for irregularly reclaimed land on behalf of the authority, which was eventually beneficial to the developer,” Mr Ouko said in the report dated August 2016.

The audit found that KPA had violated Part IV Section 8(e) of the KPA Act, which requires the board to ensure that no particular person or body is given any undue preference or is subjected to any undue disadvantage.

Mr Ouko also questioned the procurement of Waterfront Software (Kwatos) at a cost of Sh38.2 million for marine operations department and vessel tracking data in 2010. 

This is because the audit found that the system was not in use at the marine department, which is still operating on manual data collection.

“Further, the authority has been incurring maintenance cost amounting to Sh13.5 million annually since 2010 for the system.

“In the circumstances, it has not been possible to confirm the validity of Sh38.2 million intangible asset as at June 30, 2015 and propriety of the annual maintenance fees amounting to Sh13,549,994 incurred for the year ended June 30, 2015,” Mr Ouko said.

emutai@ke.nationmedia.com