Scam loading: How disputed SHA land, ghost project cost taxpayers Sh1.5 billion

The 23-acre piece of land in Karen known as LR No 24968/2 is a crime scene.

No blood was spilt, nor was any safe cracked nor shots fired. 

It is a crime scene without a corpse, a construction site without a single brick. It is a ghost project and this empty plot has consumed Sh1.568 billion in actual payments to various consultants.

Besides, pending bills worth Sh5.659 billion presented to the Social Health Authority (SHA) by various service providers await payment.

This amount comprises the cost of buying the land, quantity survey, a business plan and financial analysis consultancy fees, legal fees, architectural design service fees and feasibility study.

The deal leaves behind only a trail of forged documents, questionable payments, and a 21-year-old court case frozen in time.

SHA, the new entity that replaced the scandal-ridden National Hospital Insurance Fund (NHIF), has budgeted Sh50 million this financial year to fence the disputed land valued at Sh1.5 billion. This comes despite the original title deed being held as evidence by the Directorate of Criminal Investigations (DCI) and a 2016 court order for fencing that estimated the cost at a mere Sh4 million.

This proposed expenditure, confirmed by SHA Chief Executive Officer Mercy Mwangangi before a parliamentary committee, represents a staggering 1,150 per cent cost escalation for a fence around a property the state may not even legally own. It is, in the words of a petition now before the High Court, a case of “systematic budgeted corruption.”

Our investigations, pieced together from court documents, affidavits, and reports from the Auditor General tabled before Parliament, began in April 2002.

The NHIF, under then-CEO Ibrahim Hussein, convened a board meeting and the decision was approved by 11 directors to buy 9.25 hectares (approximately 23 acres) in Karen. The seller was a company known as Kaskazi Limited and the purchase price was Sh93,712,675. The grand plan was to build a “Medical Resource Centre “ on the land.

From the very start, red flags were violently fluttering. 

The purchase was conducted without a competitive tender and without approval from the National Treasury. A confidential letter from Treasury, dated September 2002, referenced in a 2014 Departmental Committee on Health report, explicitly withheld approval, citing “no budgetary provision and procedural irregularities.”

Yet, the NHIF board proceeded to pay Kaskazi the full Sh93.7 million. The board pressed on. The money was paid despite no transfer of the title deed.

Then, in 2004, the drama began.

A claimant, Crown Line Freighters Ltd, linked to another entity, Cirtex Kenya Limited, stormed the land, claiming ownership and commenced unauthorised development. The NHIF rushed to court and that case, Environment and Land Court (ELC) No. 691 of 2011, became the first anchor dragging this scandal into a timeless void.

It remains unresolved today, a staggering 21 years later. A ruling on July 9, 2025, did little more than admit a witness statement, with the judge noting the main suit was still waiting for a full hearing.

With the ownership now a legal field battleground, logic would state and everyone would expect all spending on the centre of excellence to stop. Instead, the opposite happened. The project was rebranded as a “Kenya Vision 2030 flagship Medical Centre of Excellence.”

This was the green light for corruption to flourish. A group of consultants was handpicked, without the competitive tendering as the law demands. Baseline Architects were brought on as the lead architects. Ujenzi Consultants Limited were hired as quantity surveyors, while Costwise Associates, represented by surveyors Nyagah Boore Kithinji and Charles Maina Mwangi, were also brought into the fold.

From 2007 to 2018, as the land dispute raged and not a single brick could be laid, the NHIF turned on the tap of graft. A river of cash totalling Sh1.5 billion flowed to these firms. The payments were for “architectural designs, drawings, and quantity surveying.”

The taxpayer paid for the idea of a hospital, an idea that was legally impossible to build. 

The Auditor General’s report for the year ended June 30, 2023, flags the Sh93.7 million land value as “disputed” and the Sh1.5 billion work-in-progress as “doubtful,” noting “no construction since acquisition.”

Parliament has not been silent. The Public Investments Committee (PIC), in its 21st and 22nd reports, unearthed the gross irregularities. The 22nd report detailed the payments for “drawings and designs” and noted that the “land was undeveloped when the Committee visited the site on 25th July.”

The Departmental Committee on Health, in a June report, delivered an even more stunning observation. After noting that NHIF’s mandate was primarily insurance, not infrastructure development, it recommended that the Ministry of Health take over the project entirely and reimburse the NHIF for all funds spent.

This recommendation, like so many others from parliamentary committees, was ignored.

Adding another layer of intrigue is a parallel criminal case. On May 15, 2023, the DCI charged two individuals—Peter David Leparakwo and Fredrick Kimemia Kimani (a director of Cirtex Kenya Limited)—with 20 counts of conspiracy to defraud NHIF of land worth Sh1.5 billion.

The charges are a tale of forgery worthy of a James Hardley Chase thriller. The accused are alleged to have forged a 1982 colonial-era allocation letter from a J.W. Faulkner of A.J. Faulkner and Sons Limited, a certificate of title, a deed plan, and even KRA PIN certificates.

New chapter

Leparakwo claims he inherited the land in 1982 from the white settler as a token of appreciation for labour rendered between 1935 and 1978. Government records from the Ministry of Lands, indicated that LR No. 24968/2 is registered in his name.

Just when the story seemed to have reached its peak of absurdity, a new chapter is being written by Dr Mwangangi.

Just when it seemed the ghost project could not get more scandalous, it has.

The SHA inherited all assets and liabilities of NHIF, including this toxic Karen land. Instead of focusing on recovering the lost Sh1.5 billion or waiting for the courts to determine ownership, the new leadership is planning to spend more.

On October 22, Dr Mwangangi appeared before the National Assembly Public Investment Committee on Social Services, Administration and Agriculture and confirmed that SHA had budgeted Sh50 million to fence the disputed land.

This is in sharp contrast to a 2016 court order that allowed the NHIF to fence the land for security purposes at an estimated cost of Sh4 million. That order was never implemented for nine years. Now, the cost has been jacked up by Sh46 million —a 1,150 per cent increase— without any clear justification or public participation. The audacity.

This move has been described in the court petition as “imprudent, wasteful, and contrary to the Public Finance Management Act.” It also appears to violate SHA’s own mandate under the Social Health Insurance Act, 2023, which limits its investments to safe financial instruments and prohibits speculative capital investment.