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Energy and Land Use: ‘Is public good is superior to the private good? Can a balance be arrived at?’

IMG_8714 Strathmore University was the venue of the first public energy forum. The Theme of the forum was ‘The rising conflict of land and compensation in the energy sector.’ Among the panelists were

  • Mr. Robert Pavel, Energy Regulatory Board
  • Mr. Aziz Chivanga, National Land Commission
  • Eng. Peter Mungai, General Manager, Business Strategy, Kenya Power
  • Dr. (Eng) John Mativo, Chief Manager, Planning and Development, Ketraco
  • Ms. Flora Okoth MD, Kenya Pipeline Corporation

 Attendants included alumni, students and guests from the private and public sector.The event was screened live on KTN thanks to The Standard Group. Other organizations involved in the organization of the forum include Brands and Beyond and Naipolitans. With increased investment in the energy sector, land remains a central point and faces various challenges including ownership, acquisition and compensation. The panelists described the roles that their organizations bodies play in the sector, the challenges they face and the milestones they have made. Each body plays a different role in the energy sector and has a different perspective towards land use. Kenya Power, for example, requires ‘right of way’ for power distribution lines but buys land in its own name for sub-stations construction. KETRACO on the other hand, is concerned with transmission and encounters land challenges like widths required for various voltage lines and these may require resettlement plans and compensation. Their lines go through people’s property which brings a huge challenges. In many cases, there are demands for higher compensation by owners paid in previous years’ e.g. in Isinya it has delayed energy projects. Ms. Flora Okoth mentioned that Kenya Pipeline is putting up a new line from Mombasa to Nairobi on land, and anticipates issues from land owners on the corridors but will handle these issues as they come. Mr. Aziz Chivanga stated that huge land compensation sums are competing with other development needs and budget constraints, slowing development speed. e.g. SGR had to use 11 Billion for land compensation! Lack of documentation by beneficiaries is also a challenge constraining “just and prompt payment” for land. Robert Pavel explained that the ERC ensures fairness and sustainability. At the moment, Kenyans are crying for cheap and reliable power supply. Land is at the center of the energy sector in Kenya and is therefore central to energy success. This brings out the importance of all the energy sector players to work hand in hand. IMG_8778

The topic of compensation was covered thoroughly, with the NLC CEO stating that Land Valuation does not differ from sector to sector. It depends on many other factors like access, location, developments on the land. Compensation of land caters for the usage of land based on how much has been used, and the loss experienced. KETRACO, on the other hand values how much or what percentage of land will be affected or disrupted or use of land lost by easements and/or way leaves The NLC CEO added that projects have to go through communities that is why they engage County Governments.

Unfortunately, The Community Land Bill has not yet been enacted and thus County governments have to be engaged where energy infrastructure passes through. He reminded attendants that the Land Act allows for “’compulsory acquisition of land” regardless of disputes.’

Dr. John Mativo explained that KETRACO compensates people to allow them to pass through their land. However, politics makes the issue even murkier. Flora Okoth added that all the intended projects are to bring services closer to the people and thus the law allows for land acquisition; that is why when need be, land will be acquired to assist with energy distribution. She pointed out that one’s land’s size doesn’t change in some cases, it just gets used up for another project.

‘Where access to land becomes expensive, it becomes difficult to provide services. A problem normally emerges where once locals are paid they create a dispute refusing evacuation from area (claiming rise in land prices) thus delaying projects. Land owners need to remember that energy infrastructure provides services benefiting the public (include they themselves).  Concerning payment, the NLC CEO explained that the law provides for ‘full payment’ and not in part/ yearly rents.They  also face resistance when they want to educate the communities. The challenge being that rich men are created overnight and soon turn into paupers because they mismanage the money.  ‘If the compensation is done monthly, the charges for the services offered will go up.’  

On an interesting note, Eng. Mungai explained that Kenya Power is not funded under the National Treasury unlike other energy sector players (It is 50% government owned with 49% private ownership). Thus it operates on an ‘entrepreneurial spirit’ requiring it to operating prudently. It has negotiated several IPPs putting up plants on private/ communal land. Private investor handles land compensation.

ERC, on the other hand has to ensure power to be reliable and fair in terms of cost. He confirmed that at the moment, all costs that go into energy generation & distribution (including land compensation) go into your monthly bill. Kenya Power is looking at 2020 and 70% of Kenyans to be connected. The limitation for use of land through which transmission lines pass through is lower than that for distribution lines. The largest issue for power distribution lines is encroachment which delays access to, and repair of infrastructure over outages.

The NLC CEO also mentioned the intention they have to have an overall oversight role on land-use planning nationwide. This has put them against physical planners, who are advocating for the Physical Planning Amendment Act over the Land Use Planning Bill. He explained that as one nation laws should be developed for purposes of posterity. Energy infrastructure (and all infrastructure) sits on land thus we need frameworks that have in mind the common good. Compensation may also take the angle of land to land and not land to money. Though the law allows for land banking (setting aside land for future use) and traditional dispute resolution mechanisms, NLC is only 2 years old & these are not easy tasks. Dr. John Mavito stated that vandalism has faced is costing the nation a lot of time & money (most parts are imported). Eng. Peter Mungai explained that currently we are at 2111 MW. 21 PPAs have already been signed, to bring in over 1900MW of power. Their plan is not only to rely on Hydro Power.

 Kenya is trying to change her energy mix from pure hydro reliance to geothermal, wind, solar, coal and gas. KenyaPower partnering with county governments to “power up our cities” through street lighting, to encourage 24-hour economies. There is a formula which is able to serve the customer in a cheap price. There is a plan to shift from reliance on hydro power, towards renewable energy, to light up places and supply energy demand.’

In  conclusion, land is valued by independent valuers, land owners can then get their own private valuer sort disputes with ISK. Citizens have to appreciate electricity as part of development. Energy infrastructure is always about reasonable projects and development and thus citizens and county governments should support energy projects through land provision. There is need to do a lot of education about Land compensation and  sensitization on different land compensation mechanisms (easements, compulsory acquisition, etc). ERC has approved a preferential tariff for street lighting for county governments  as the Government pursues VAT exemption for solar projects to increase uptake.  

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