Standard Group, Safaricom face demolition threat

January 18, 2011 12:00 am

, NAIROBI, Kenya, Jan 18 – Safaricom Limited and Standard Group are among several companies whose multi-million shilling buildings have been earmarked for demolition under a compulsory acquisition programe by the government.

The government has announced intentions to acquire land where Safaricom\’s two sites on Waiyaki Way and Standard Group\’s ultra-modern building on Mombasa stand for purposes of a road expansion project.

In a Gazette Notice dated December 31, the Ministry of Lands announced it would acquire various parcels of land of varying sizes on both sides of Mombasa Road and Waiyaki Way.

The government said it intends to acquire the land in order to expand the road between the Jomo Kenyatta International Airport through to Museum Hill and Gigiri.

In a quick rejoinder, Safaricom Limited\’s CEO Bob Collymore said the company does not own the buildings they operate from and would be negotiating with their landlords to get a practical solution.

"Safaricom is not in the business of brick and mortar and as such, we do not own any of the sites from which we operate," Mr Collymore said in a statement.

"We are in touch with our landlords and the authorities with a view to working out a practical resolution."

The two buildings on which Safaricom operates from are not built on a road reserve but the government has indicated it will be invoking the section of the law that deals with compulsory acquisition to use it for a road expansion project.

Under such arrangement, the government compensates legitimate owners of the land as per the current market value of their property.

The management of the Standard Group, owners of KTN and Standard newspapers said consequences of the intended acquisition were far-reaching in terms of "massive destruction of existing businesses whose economic value in terms of productivity, capital investment, loss of employment and services will be worth tens of billions of shillings."

"The stakeholders have commissioned an independent audit and a final figure will be given in due course, notwithstanding the adverse ripple effects," Standard Group Limited deputy chairman Paul Melly said.

In addition, the Standard management said, the overriding negative impact was to actualize the destruction of the Standard Group as a media house and deny Kenyans their right to press freedom.

"The overriding economic impact will be not only to undermine Kenya\’s investment climate both locally and internationally, but also bring in a worrying element of uncertainty on predictability of land usage in the country," they protested.

The statement said a consultative meeting of key stakeholders convened on Tuesday had resolved that "such action is arbitrary, autocratic and smirks of an attitude of a Government that does not care about private investments."

"The stakeholders expressed shock and disbelief that a democratic government can adopt a high-handed approach of unilaterally announcing an intended compulsory acquisition without due regard to a consultation process," the statement sent to newsrooms said.

They said that the parcels of land in question constitute private, legally acquired assets and not any land earmarked as road reserve – a fact verifiable by the absence of a caveat in Ministry of Lands records.

The Standard Group opined:  "Those charged with the responsibility of design and development of the country\’s road master plan have failed in their duty, care and professionalism to plan for workable solutions consistent with best international practices and have elected a draconian option that amounts to destruction of tens of billions of shillings worth of investment and loss of thousands of jobs."

The Standard Group believes that their businesses are being targeted because "It is apparent from the road design that the routing could have been influenced by other factors that amount to a conspiracy to target specific businesses as evidenced by the inconsistency in the width of expansion and where the road begins, besides lack of transparency in the project design."

They have called on President Mwai Kibaki and Prime Minister Raila Odinga to intervene and stop the intended demolition.

"We urge the President and the PM to have the [road] design shelved and to challenge those responsible to come up with alternative road routing and workable designs that have limited negative economic impact."

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