Railways retirement scheme protests lease of property

Kenya Railways Staff Retirement Benefits Scheme is under fire for leasing one of its property in Mombasa without following procedure.

The scheme’s members have petitioned the Kenya Procurement and Regulatory Authority and the Ethics and Anti-Corruption Commission to investigate how the property was leased.

Situated in Kizingo, the Chambillo estate houses consist of 32 units on 2.67 acres.

There are eight blocks each containing four houses.

The property changed hands from the Kenya Railways Corporation to the scheme through a legal notice of May 7, 2006.

In 2009, the World Bank used Sh26 million to rehabilitate the houses, an exercise completed in 2012. To enable the refurbishment, the initial tenants were asked to leave.


The pensioners now say a new tenant was given a 50-year lease and, to date, the houses have not been occupied.

“The above property was allegedly leased for 50 years in 2012 and we have tried to get documents to support the same through the scheme’s office but to no avail. Our fears are compounded by the fact that the property does not bring any income to the scheme,” wrote some of the tenants to KPRA.

The retirees have written to the chief executive officer of the scheme seeking documents relating to the lease. They are yet to get feedback.

But in response, the scheme’s CEO Simon Nyakundi said the lease was done above aboard. He said the property was leased to Trident Insurance Company.


“The documentation is available. A tender was done within the law and the property is generating income. We get Sh500,000 every month and that is what matters. Whether the houses are occupied or not is another issue; what I know is we get revenue every month,” he said.

Mr Nyakundi said the value the pensioners would have got if they sold the property is much lower than the current arrangement of lease.

“For six years, that property did not bring an income; some people with ulterior motives do not wish us well,” he said.

When it was formed in 2006, the scheme had 12,000 members but the number has reduced due to natural attrition.


Land and buildings located in Muthurwa, Kilimani, Land Mawe, Nairobi West, Makongeni, Upper Hill, Ngara, Ngong Road, Hurlingham and the main Railways terminal, all in Nairobi, were given to the scheme in 2006 to help assist the retirees in their sunset years.

A report done by Retirement Benefits Authority staff as early as 2010 found wanton mismanagement of the scheme’s assets.

A director of the Corporate and Pension Trust Services, Mr James Olubayi, defended the move to lease the Mombasa property, saying there was nothing to hide.

“If we were to refurbish the buildings, it would cost over Sh100 million. The investors have sought to refurbish the houses at their cost and in the meantime they are paying,” he said.


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