Tata Chemicals Magadi Ltd Operations Halted Over Land Rates

Kajiado,

Thursday, January 18, 2024,

KNA by Diana Meneto/Sammy Rayiani

Tata Chemicals Magadi company operations have been halted in the Kajiado depot over unpaid land rates arrears amounting to over Sh10 billion owed to the Kajiado county government.

In a letter written by Regional Business Connection(RBC), a Nairobi company hired by Kajiado County, the soda ash mining company has continued to default on its constitutional and county legislation requirements by failing to honor payments of county charges and taxes as required by the Kajiado County Finance Act 2016,2020,2023 and the Kajiado County Revenue Administration Act, the Public Finance Management Act, and the County governments act.

“It is given your company's continued legal defiance that we hereby order the closure of your business premises in Magadi and at Kajiado Railway station as from Monday, January 16 2024 by yourselves voluntarily as guided by Section 22, Part IV of the Kajiado County Finance Act 2023 up and until when you regularize payments with our client or an agreeable repayment plan of all outstanding payments is agreed upon.” Read parts of the letter. 

The letter further indicated that Kajiado County shall station enforcement officers in all Tata Chemicals Magadi Ltd premises within Kajiado County to ensure compliance with the order.

By Wednesday, the soda ash company had not yet complied with the orders, and their Kajiado depot was closed by inspectorate and revenue officers from the county.

 In his response, Tata Chemicals Magadi Ltd Managing Director Subodh Srivastava termed the closure of their company as illegal and unfounded. 

It is imperative to highlight that the County debt collector lacks the authority to close any facility without a court order, particularly as the matter of rates is currently before the Court of Appeal awaiting determination,” read sections of the letter. 

He adds that the potential closure of the company jeopardizes its pivotal role in the country's development agenda, and impacts GDP and vital foreign exchange earnings from international markets. The government stands to lose over Sh560 million in royalties to the Ministry of Mining and over Sh1.3 billion in taxes to the Kenya Revenue Authority.

He also adds that the move poses a severe threat to the well-being of the company's 490 employees and over 800 contractors and their families, as well as the Maa Community, who derive substantial benefits from the company’s operations. 

“It will also disrupt various community impact programs, including the operation of a 55-bed Level 4 hospital providing subsidized healthcare, the education of over 500 pupils at Magadi Primary School, and the provision of bursaries to needy students in the community. Additionally, it will impact the supply of water to the community and the Kenya Police College based in Magadi.” He said

James Ndwiga, the field operations manager at RBC noted that Tata Chemicals was served with a county invoice and a reminder of the outstanding amount last year but the company has not shown any interest in settling the amounts or any matter outstanding therein.

He adds that the company has continued to leverage on a competing mode against the county other than resolving the matter at hand whereas the judge had directed in a ruling made on 3rd May 2019 for the two parties to settle the matter within six months via arbitration guided by relevant national Ministries.

Tata Chemicals however opted out of the arbitration proceedings which were being guided by the then Ministry of Mining and Petroleum as directed by the Kenya High Court without showing any cause.

The row over the arrears has been simmering since the year 2018.

Courtesy; KNA