Treasury has told State agencies and county governments that it has no special funds for compensation of land way leaves.
Thus, ministries, departments and agencies (MDAs) as well as the regions, are expected to exercise prudence when paying for project land.
In a new circular, Treasury issued a checklist for mandatory requirements on seeking external financing, including undertaking advance surveys, mapping and ring-fencing of Government assets to avoid unnecessary compensation.
“Funding including but not limited to land and way leave compensations among others that form part of counterpart funding must be prioritised under the ministry’s sector allocation through the normal Medium Term Expenditure Framework (MTEF) budgeting process in accordance with the requirements of the loan agreement,” said Treasury in the circular.
“Kindly note that the National Treasury does not have special allocation for this purpose.”
Land compensation is one of the expenses that have inflated the cost of projects, a problem that President Uhuru Kenyatta is keen to address by raising the bar on transparency and accountability during implementation.
The Standard Gauge Railway, one of his flagship projects, has been dogged by land compensation debacle.
In its second phase – from Nairobi to Naivasha- hundreds of property owners are reported to have fraudulently claimed compensation with the help of corrupt Government valuers, pushing up the total compensation bill to Sh15 billion.
This has since been rejected and fresh valuation started, resulting to a figure below Sh7.5 billion.
Among other requirements in Treasury’s circular is the need for MDAS to conduct feasibility studies to show the projects’ economic viability, costing and design.
There should also be commitment to relocate public utilities such as electric and sewer lines.
State agencies and county governments also need to confirm adequate human resource capacity for project implementation.