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Tata Chemicals Faces Auction over Sh17 billion in County Land Rates

A bitter row has erupted between Kajiado County Government and Tata Chemicals Ltd over unpaid land rates amounting to a whopping Sh17 billion.

The defaulted land rates date back to 2013 and accrue from the company’s 224,991 acres where the company operates and extracts soda ash in Magadi, Kajiado West.

Tata Chemicals, formerly Magadi Soda, owes the County the Sh17 billion calculated at a rate of Sh14, 000 per acre as per the current Finance Act.

But while reacting to county government’s allegations on outstanding and ballooning land rate bill, the company’s executive director, Harish Nair, said; “We have worked with the county government in a transparent manner”.

Nair however said he strongly denies the “malicious and ill-founded allegations” that is part of any deals that were an “Act of Fraud.”

“We are bound by Tata Code of Conduct, and we ensure compliance to all laws and full transparency in all our business dealings,” claimed Nair.

He said; “TATA Chemicals Magadi and Kajiado County Government work jointly on various issues concerning county and local community including lease rates, which are agreed from time to time.”

But sources at the county government claim the long running arrears had been negotiated downwards in a February 2015 “secret deal” in a bid to cushion the company from collapse following the ballooned land rates arrears.

Documents in our possession show the deal sought to reduce the rates charged per acre from the Finance Act’s Sh14, 000 to Sh120.

The alleged deal, which Tata Chemicals have denied, would remit to the County Government about Sh27 Million every year, and not the Sh3.1 billion as per the current Finance Act.

However, Tata Chemicals Ltd is now in trouble after the current Administration rejected the agreement with Governor Joseph Ole Lenku categorically stating that the said deal in 2015 was an “Act of fraud” against the People of Kajiado.

The County’s directorate of Revenue has gone full throttle after defaulting corporate organizations, with Tata Chemicals being one of the leading defaulters.

According to the County’s revenue account, Tata has been remitting revenue as per the agreement but the County has only treated this as part of the Sh17 billion arrears.

So far, slightly more than Sh100 Million has been remitted by Tata Chemicals, according to documents availed from county directorate of revenue.

Director of Revenue David Muntet refused to discuss the Sh17 billion arrears in detail and referred the media to Governor Joseph ole Lenku.

However, Muntet curtly said; “Yes, it is true Tata Chemicals owes us billions of shillings but the matter is being handled internally. There have been official correspondences on the same.”

TATA Chemicals Magadi executive director expounded further that it has a long and symbiotic relationship with Magadi-Kajiado fabric wherein they step in to meet various essential needs of the community.

“The land under concession being of a very diverse nature, the lease rates have always been agreed upon in a manner which supports the existence of the unit, which in turn ensures the growth of the community,” said Nair in a statement.

Nair stated; “For the current year also, the negotiations are under way between our management and county government and will be resolved as soon as possible by both parties.”
But Muntet said the county government is bound by Finance Bill which cannot accept any negotiations with debtors.
“We operate under Finance Bill guides that dictate that rates must be paid according to standing rules and not negotiations,” said Muntet.

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