The Nairobi County government has suffered a setback in its bid to reorganize estates in Eastlands part of the city following a court order barring partner developers from using title deeds to secure loan to develop the areas.
In a case filed by Sheria Na Watu against Nairobi City County, County Assembly of Nairobi, National Land Commission, Felix Oluoch Otieno and Patrick Maina Mwangi, Land and Environment Court ordered for the suspension of an arrangement allowing the private developers to use title deeds as a collateral in raising funds for the houses.
“That until 4th July 2023, a conservatory order is hereby issued suspending the implementation of the resolution by Nairobi County and approved by County Assembly of Nairobi to have developer of the Pangani Urban Renewal Project as well as all other properties earmarked for urban renewal projects to deposit title deed for the said land as collateral with financial institutions,” said Justice E.K Wabwoto.
The order has been copied to Kenya Commercial Bank, I&M bank, Cooperative Bank of Kenya, Standard Chartered Bank, Equity Bank, Family Bank, Absa Bank and NCBA Bank Limited.
URBAN RENEWAL PROJECT
The Urban Renewal Plan focuses on the old public housing estates and adjacent areas in Eastlands.
Eastlands currently experiences a number of development challenges, some of which include dilapidated housing, uncontrolled or illegal housing extensions, environmental degradation, urban poverty, dilapidated infrastructure and services, inadequate public transport, overcrowding or congestion, inadequate inter-linkages, lack of updated development plans and sitting tenants.
The plan provides a framework for the transformation of Eastlands through provision of decent housing, development of a functional urban system and delivery of a responsive and sustainable model for the redevelopment of the entire project area.
The project area covers an area of 1264 Ha and an estimated population of about 150,000 people expected to rise to over 500,000 by 2036.
The County is implementing the project under a joint venture arrangement with its development partners. Under the joint venture plan, the County and the developers formed a Special Purpose Vehicle (SPV) for implementation where the county government holds majority shares of 99 per cent while private developers hold one per cent.
According to the County Assembly orders of the day document seen by Kenyan Wall Street, a sitting held on 18 April this year, the County Executive Committee resolved that Nairobi City County Government title deeds for the urban renewal project sites be deposited with financial institutions to act as simple no-collateral deposits in order to enable the joint venture development partners to raise finances necessary to implement the urban renewal.
And taking into account the significance of the project to the residents of Nairobi, the county assembly approved the resolution of the county executive of 18 April 2023 that title deed for Pangani Estate urban renewal project site be deposited with the requesting financial institution, as simple non-collateral deposit, to facilitate the joint venture development partner to raise financing of the project.
Commenting on the approval, Kileleshwa MCA Hon Robert Alai noted that this was one of the most illegal moves by the county assembly. “It is sad that we allowed this to happen,” he said.
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