NAIROBI, Kenya – A forensic audit by the Auditor-General has exposed widespread irregularities in the Kenya Electricity Transmission Company’s (Ketraco) land compensation program, raising fresh concerns about governance and accountability in government infrastructure projects.
The audit, tabled in Parliament, reveals that Ketraco paid out Sh12.99 billion to landowners affected by power transmission projects between the 2010/11 and 2022/23 financial years—often without proper documentation, lawful approvals, or verified land valuations.
Auditor-General Nancy Gathungu’s report shows the total allocation for wayleave compensation stood at Sh17.02 billion, leaving an outstanding balance of Sh4.03 billion yet to be paid.
“Electricity transmission infrastructure is vital for national energy security and economic development. Wayleave compensation ensures fair and lawful payments for land, crops, and structures affected by transmission projects,” the report notes.
However, it warns that weak internal controls, inconsistent valuation practices, and missing documentation have exposed the government to potential litigation, project delays, and financial losses.
Inflated Valuations and Unsupported Payments
The audit cites glaring discrepancies between approved Resettlement Action Plans (RAPs) and actual payments, irregular revaluations, and instances where compensation was issued without supporting evidence or legal clearance.
In one of the most striking findings, compensation under the Nairobi Ring (Suswa–Isinya) project ballooned from an estimated Sh283.1 million in the RAP to Sh2.2 billion—an unexplained increase of Sh1.9 billion.
Similarly, for the Olkaria–Lessos–Kisumu (OLK) line, 19 parcels of land initially valued at Sh27.9 million were compensated at Sh41.7 million, despite the absence of any documented revaluation process.
The Kenya–Tanzania line also recorded significant anomalies, with 58 parcels reportedly overcompensated by Sh133.4 million, while 14 others had their valuation doubled from Sh65.9 million to Sh128.6 million without evidence of market-based reassessments.
Unqualified Valuers and Questionable Procedures
The report further flags the irregular engagement of valuers, including M/s Realmast Limited, which was not pre-qualified under the Public Procurement and Asset Disposal Act (2015–2017).
Only 259 out of 3,132 affected parcels were sampled for valuation, with no documentation on the selection criteria—making it “impossible to verify the accuracy and authenticity of payments,” the report says.
In another case, Sh17.8 million was paid to 65 landowners along the Kenya–Uganda transmission line who had rejected the compensation offers—contrary to law, which requires payment only after acceptance and execution of agreements.
Projects Affected Across the Country
The audit covered several donor-supported transmission projects, including:
- Olkaria–Lessos–Kisumu (OLK): Sh5.58 billion allocated; Sh2.27 billion pending.
- Ethiopia–Kenya: Sh2.62 billion allocated; Sh2.31 billion paid.
- Kenya–Tanzania: Sh1.64 billion allocated; Sh1.3 billion paid.
- Kenya–Uganda: Sh1.84 billion allocated; Sh478.7 million unpaid.
- Turkwel–Ortum–Kitale: Sh865.3 million allocated; Sh650.8 million paid.
- Nairobi Ring (Suswa–Isinya): Sh2.2 billion paid; Sh146.36 million pending.
- Machakos–Konza Line: Sh55.4 million allocated; Sh29.8 million paid.
The audit also found that three unapproved valuation schedules worth Sh314.7 million led to Sh49 million in irregular payments, and that unauthorized “top-ups” were made on some compensation claims.
Call for Policy Reform
The Auditor-General concludes that Ketraco’s weak oversight, absence of clear valuation policies, and lack of a standardized framework for renegotiations have left the state-owned company vulnerable to waste and corruption.
She recommends the development of comprehensive policies to guide future compensation, valuation, and dispute resolution processes in transmission projects.
