Aerial view of Makongeni Estate on July 12, 2019 in Nairobi. PHOTO | KANYIRI WAHITO
Muthurwa and Makongeni estates in Nairobi will be sold to the
government to boost the cash flow of
the Kenya Railways pension scheme, which owns the two properties.
the Kenya Railways pension scheme, which owns the two properties.
The government will use
the Muthurwa land for the expansion of Jogoo Road and Makongeni's 139
acres for the building of affordable homes under President Uhuru
Kenyatta’s Big Four agenda.
The Kenya Railway Staff
Retirement Benefits Scheme (KRSRBS) was established in 2006 to manage
pensions for workers who had exited the rail firm. But it has been
unable to make prompt pension payments due to poor cash flow, prompting
the property sale to plug a Sh500 million funding deficit.
Treasury
Chief Administrative Secretary (CAS) Nelson Gaichuhie told the National
Assembly Committee on Finance and Planning yesterday that a memo has
been drafted and presented to the Cabinet Secretary for Transport and
Infrastructure, James Macharia, for onward transmission to the Cabinet
for consideration and approval.
Muthurwa and Makongeni
are among the 23 residential and commercial assets worth Sh12 billion
that were transferred to the scheme to generate funds for the
pensioners.
“The scheme relies on assets that are dilapidated and illiquid
and it is experiencing challenges in paying pension,” Mr Gaichuhie said
in response to a question by Naivasha MP Jayne Kihara.
The
MP had sought a statement from the Treasury explaining the delay in
paying the pensions, subjecting most beneficiaries to miserable lives
retirement.
Mr Gaichuhie cited default in rent payment,
legal suits against some of the assets and the dilapidated nature of
most assets as the scheme's challenges, among others.
The
scheme's monthly pension liability has risen from Sh25 million in 2006
to Sh70 million today, against only Sh45 million generated in the same
period.
Mr Gaichuhie identified the 42-acre Ngara estate as the only one without encumbrances and therefore easy to dispose of.
The
ownership of some of the properties is contested in court while the
eight of the assets are not registered and therefore cannot be sold.
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