Ketraco yet to pay landowners Sh4 billion in wayleave compensation

A forensic audit report by the Auditor General has exposed Ketraco for failure to pay wayleave compensation to land owners, amounting to Sh4.03 billion.

The report tabled before the National Assembly shows that the compensation had been pending since the 2018/2019 financial year and had accrued from the implementation of seven donor projects.

They include the Ethiopia-Kenya transmission line, Kenya-Tanzania transmission line, Kenya –Uganda transmission line, Kenya power transmission system improvement project, Nairobi Ring project (Suswa-Isinya transmission line) an Indian funded project and the Olkaria-lesos transmission line.

According to the report, the value in the compensation schedules of the seven donor-funded projects under review amounted to Sh17.02 billion out of which Sh12.98 billion had been paid, leaving an outstanding balance of Sh4 billion as at June, 2023.

“The primary objective of the audit was to establish the accuracy and genuineness of the long outstanding wayleave compensations in all the seven donor-funded projects. In addition, the audit sought to establish compliance with the law by the Ministry of Energy and Ketraco during the compensation process,” reads the report in part.

Under the Ethiopia-Kenya transmission line project, Ketraco implemented the Eastern electricity highway project which is a 500 KV high voltage direct current (HVDC) transmission line covering 1,045 kilometers between Ethiopia and Kenya.

The construction of the transmission line which traverses a total of 2,638 parcels of land, commenced in October 2015 and was completed on November 8, 2022.

The report also details that despite Ketraco publishing 1569 parcels of land which would be affected, there were four registration blocks comprising 399 parcels of land which were affected but not publicized.

They include Longonot-Kijabe/Block 6 (Nyakinyua), Kajiado/Ewaso-Kedong , Kijabe/Block1 (Mai Mahiu) and Mara/Suswa Kitet.

The Auditor General report also criticised Ketraco’s decision to pay top ups (second payments) amounting to Sh24 million to 59 Project Affected Persons (PAPs) despite the Resettlement Policy Framework 2011 and 2021 not having provisions for payment of top-ups.

“The audited financial statements for the year ending June 30, 2022 revealed that the project had an amount of Sh309,065,381 at Ketraco’ s operations bank account. An escrow account should have been opened to deposit the monies for compensations that were not utilized. As at the time of audit, an escrow account had not been opened,” Auditor General Nancy Gathungu notes in the report.

And in regards to the Kenya-Tanzania Transmission Line covering 94.8 kilometres, Sh321.7 million is yet to be paid as it emerged that Ketraco only settled claims worth Sh1.3 billion out of the total claims of Sh1.6 billion. The Sh1.3 billion comprises Sh1 billion for parcels of land, Sh36.7 for structures and Sh223.9 for crops.

The report further lays bare how Sh116.1 million of the total claims paid to PAPS was irregular as 48 out of 58 parcels of land were overvalued by Sh133.3 million. The report indicates that the 58 parcels were supposed to be paid Sh159.6 million and not Sh292.9 million that was approved for payment.

“Payment vouchers for compensation to landowners amounting to Sh18,304,071 did not have supporting documents to confirm easement.”

Under the Kenya- Uganda Transmission Line, the report shows that out of the total claims of Sh1.8billion, Ketraco has paid Sh1.3 billion for land structures and crops resulting in an outstanding wayleave compensation of Sh478.million. Interestingly, the report notes that out of the Sh1.3 billion paid out, Sh17.8 million was irregularly paid out to 65 PAPs as they had rejected the offer letters.

There was also the Kenya-Power Transmission Systems Improvement project, which the report details that Ketraco is yet to settle claims amounting to Sh263.7 million. It had so far settled claims totaling to Sh2 billion out of Sh2.3 billion.

As for the India funded project affected 3,241 PAPS and comprised two transmission lines namely 220KV Turkwel -Ortum -Kitale and 132 kv Machakos Konza Kajiado -Namanga and five substations, the report shows that the outstanding payment amounts to Sh240 million.

Whereas with regards to the Nairobi Ring Road Project, the audit shows that the pending amounts stand at Sh146.4 million, as Ketraco had managed to pay Sh2 billion for 707 PAPS out of the total claims amounting to Sh2.2billion.

At the same time, details on the Olkaria -Lessos project which was undertaken in three lots, reveal that out of the total compensation of Sh5.6 billion, Ketraco paid Sh3.3 billion leaving an outstanding balance of Sh2.2 billion. This, the report noted, indicated that the compensation payments had covered only 59 per cent of the total amount due, with compensation for land being at 43 per cent of the expected amount.