NAIROBI, Kenya, Aug 25 — Kenya Railways Corporation, the national government and the Kisumu County Government have been ordered to pay more than Sh76.8 million arising from the demolition of a lakeside business in Kisumu.
The Environment and Land Court directed the responsible accounting officers to settle the compensation awarded to the proprietors of Tilapia Beach Resort.
The amount comprises Sh76,873,366 in compensation, taxed costs of Sh963,543 and interest accruing at court rates until full payment is made. The court also awarded Sh100,000 as costs for the latest judicial review proceedings.
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The dispute dates back to August 8, 2019, when buildings and business facilities belonging to Tilapia Beach Resort were demolished.
The resort and its proprietor, Amina Achieng Ochieng, subsequently sued Kenya Railways, Kenya Ports Authority, Kisumu County and the Attorney General, arguing that the demolition had been conducted unlawfully.
Compensation awarded after demolition
In a judgment delivered in February 2022, the court awarded Amina Sh27 million while Tilapia Beach Resort Limited received Sh49,873,366 for the destroyed structures and business assets.
Kenya Ports Authority was cleared of liability, leaving Kenya Railways, Kisumu County and the national government responsible for settling the award.
Despite obtaining the judgment and a certificate allowing enforcement against the government, the successful litigants were unable to recover the money. They returned to court seeking an order compelling the accounting officers of the public bodies to make the payment.
The court found that settling an award entered against a public institution is a statutory obligation and cannot be treated as a discretionary decision.
Kenya Railways had indicated that it budgeted for the amount and sought funding to settle the decree but was awaiting a response from the National Treasury.
The court nevertheless held that a lack of budgetary allocation could not indefinitely prevent successful litigants from receiving money awarded to them.
Ruling adds to pressure on Kenya Railways
The payment order comes as Kenya Railways manages substantial financial obligations connected to its passenger, freight and infrastructure operations.
The corporation recorded fewer passengers on some of its services in 2024 despite increased Standard Gauge Railway revenue following higher fares. A detailed Metros Kenya analysis of SGR and commuter rail performance showed that commuter rail ridership also declined during the period.
Kenya Railways is simultaneously overseeing the renewed expansion of the SGR from Naivasha towards Kisumu and eventually Malaba. The revived SGR expansion programme is intended to strengthen connections with western Kenya and neighbouring Uganda.
The new court order is not expected to affect passenger train schedules directly. However, it places another financial obligation on a corporation already balancing infrastructure investment, operational expenses and debts associated with railway development.
Passengers using Nairobi services can find separate information covering commuter rail stations, connections and the Nairobi–SGR Terminus link train.
The case could have wider consequences for public agencies that delay paying court awards on the grounds that the required money has not been included in their budgets.
