The Kenya Railway Company has been accused of illegally selling parts of land given to former employees as compensation.
According to the retired employees, the state agency has sold part of the land worth Ksh12 billion that they were issued in 2006 after the management of the Kenya Railways failed to pay their pension.
The former employees of the state say the company has also destroyed a library. The land in question is in Valley Road, with Land Reference number 209/1064/1,2,3,4 & 5.
According to the aggrieved former employees, Kenya Railways was unable to pay their pensions between 2005 and 2006. When the issue became too much, an agreement was reached to create a pension scheme for the railway workers.
Under the deal, Kenya Railways would hand them the track of land to cover pensions of the members until the last one crossed to the other side, after which the company would add 23 years before doing anything with the land.
They allege that they entered into the agreement with the agreement of the government.
“Around the year 2004-2005, the Kenya Railways management were unable to pay us pension. In the process and with agreement with the government, it was agreed that a pension scheme be formed.”
“A pension scheme was formed, and since the railways was unable to pay, it was agreed that they give us property worth Ksh12.4 billion to take care of the pensioners from that day up to the last day the pensioner departs from this earth and thereafter to continue with the scheme for the next 23 years after the last pensioner has passed on,” the aggrieved employees told the media while demonstrating in Nairobi on Friday.
The employees have threatened to go to court over what they term illegal annexation of the land they say they now own. Kenya Railways has yet to issue any statement on the matter.
In 2006, the Kenya Railways Corporation underwent a significant restructuring, leading to the concessioning of its operations to the Rift Valley Railways Consortium.
This transition resulted in the retrenchment of thousands of employees. To address the retirement benefits of these former workers, the Kenya Railways Staff Retirement Benefits Scheme (KRSRBS) was established in the same year.
The scheme was tasked with managing the retirement benefits of approximately 9,500 pensioners and 2,021 active (deferred) members.
To fund the scheme, assets valued at approximately Ksh12.4 billion were transferred from the Kenya Railways Corporation to KRSRBS.
These assets primarily consisted of land and buildings located in prime areas such as Nairobi's Muthurwa, Kilimani, Landmawe, Nairobi West, Makongeni, Upper Hill, Ngara, Ngong Road, Hurlingham, and the main railway terminal.
The expectation was that income generated from these properties, through rentals or selective sales, would sufficiently cover the pension liabilities.
But despite holding assets valued at approximately Ksh31 billion, the illiquid nature of these holdings has led to cash flow issues, resulting in delayed or reduced pension payments to retirees.
