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The multibillion-shilling Kenya Railways staff Retirement Benefits Scheme is under threat literally.

Mired in a mix of conflict of interest at the top level and unholy alliances with consenting appointed managers, the Kenya Railways Corporation pension scheme could easily be sitting on the precipice, amid emerging heartrending reports of long suffering pensioners crying out for help.


Until recently, the retirees had not received their pension over a period of seven months, only to be paid their February dues two weeks ago, barely managing to reduce the backlog to Sh432 million, six-month arrears; a harsh reality of pensioners paid only two times a year.

Defining the pensioners’ troubles is the conspicuous conflict of interest typified by the Zamara Group – formerly Alexander Forbes – that owns Corporate and Pension Trust Services Ltd, which until the July 23 2019 election of three new members to the scheme’s board of trustees, was the sole corporate trustee that managed the KRC pension scheme.

And the elephant in the room here is former Kenya Revenue Authority commissioner-general Michael Waweru, whose July 8 2018 appointment as KRC chairman seems to have run counter to the scheme’s interests.

Tellingly, Waweru’s appointment coincided with his position as Zamara Group chairman, a perfect harbinger of conflict of interest.

In the intricate web of affairs, James Olubayi, the chairman of Corporate and Pension Trust Services Ltd, and the sole corporate trustee’s two directors, Anthony Kilavi and Bungoma governor Wycliffe Wangamati, report to the same chairman at Kenya Railways, as well as in Zamara Group. Olubayi doubles up as the executive director at Zamara Group.

With Waweru now under the DCI radar, circumstances leading to fraudulent payment of more than Sh22 million recently made by Corporate and Pension Trust, the giant pension scheme’s erstwhile administrators just as their term was coming to an end, still remains a mystery.

In a letter dated August 9 2019, two newly elected trustees of the pension scheme, James Kanyeki and Henry Toili, want Director of Criminal Investigations George Kinoti to probe into the circumstances under which the money was paid, with a clear focus on “the activities of the outgoing corporate trustees whose tenure of office ended on July 31 2019”.

In the letter, Kanyeki and Toili – also the Former Kenya Railways Workers Association national organising secretary and national secretary respectively-painfully disclose the withdrawal was done outside the term of CPTSL, which has been managing the pension scheme since July 2012 until the end of July this year. Fokerawa is the umbrella body for the Kenya Railways retirees.

But according to Kilavi, the payment in question was CPTSL’s monthly retainer, Sh1.25 million per month allegedly consistent with their contract. This money, Kilavi claims, had not been collected for nearly two years.

It emerges that the money was withdrawn in two tranches of Sh8.3 million and Sh14 million on July 31 2019 and August 2 2019 respectively.

Waweru’s hasty retreat purporting to have since relinquished the chairmanship at Zamara defeats logic, against a backdrop of the corporate world’s ‘business-as-usual’ theatrics, through proxy, hence the jitters at the retirement benefits scheme.

Well-placed sources intimate the outgoing corporate trustee was yet to hand over to the newly instituted board of trustees. Still, CPTSL’s extended stay at KRSRBS is argued to be an illegality.

Whereas the Retirement Benefits Authority Act requires that sole corporate trustees only manage a pension scheme for a three-year term renewable only once by the members through an election, CPTSL were accorded the privilege of doing business with the Sh80 billion-rich KRSRBS for seven years.

Appointed to manage the railways pension scheme on June 29 2012, CPTSL’s three-year term lapsed in June 2015, upon which its tenure was lawfully renewed for another three more years until June 2018.

Pensioners blame the sole corporate trustee for running down their scheme amid reports of wanton mismanagement of the schemes assets as pensioners went for months without pay, with the scheme losing six pensioners per day to ravaging financial hardships.

In a petition to the Interior CS Fred Matiang’i seen by Weekly Citizen, Fokerawa decries endless instances of malpractices and impunity perpetrated by the managers of the pension scheme.

Turning to Matiang’i in his capacity as chief minister, officials lament railways retirees had gone for “a record seven months” without pay, occasioning an alarming high mortality rate of between six to nine pensioners per day.

Signed by Toili and copied to Kenya Railways acting managing director Philip Mainga and KRSRBS chief executive Simon Nyakundi, the Fokewara petition cites conspiracies between the sole corporate trustee and their co-conspirators to swindle the pensioners of their property which they would later sell to the highest bidder.


The pensioners lament that their sponsor (the Waweru-led Kenya Railways Corporation board of directors), the sole corporate trustee (Zamara) and the regulator (RBA) appear insensitive to the plight of retirees.


It emerges that Zamara Group, through its CPTSL subsidiary that controls or is a service provider in actuarial matters for about half the number of state corporations or pension schemes affiliated to them.

“After running down the Kenya Railways pension scheme, Zamara has won the tender as a service provider for the Kenya Revenue Authority,” states the Kefowara petition dated June 3 2019, adding. Our frustrations were ignited by the recent appointment of the KRC chairman of the board Michael Waweru, who is also currently the chairman of Zamara,” it read.

A scheming corporate executive in his own right, Waweru would sanction the pension scheme’s forensic audit to be undertaken by the Auditor General, only to find his way to RBA in favour of Ernest & Young, a private entity.

It is instructive to note that the KRC chairman is a managing partner at E&Y, charged with implementation of big time deals. Waweru is also a major shareholder of Trans Century, the conglomerate that ran down Rift Valley Railways, RVR.

Before Trans Century clinched the deal, South African firm, Sheltam, whose chief executive Roy Puffet was at the top of things, had won the concession to operate the RVR consortium with remarkable success.

A shrewd businessman by all standards, Waweru is Mombasa governor Hassan Joho’s business partner at Autoport. The former KRA boss is said to have recently acquired a Sh2 billion stake at Kenya Airways.

At KRC, the board chair has a soft spot for Sammy Gachuhi, the chief operating officer who he unsuccessfully attempted to install as acting managing director in the dramatic aftermath of managing director Atanas Maina’s replacement.

Kenya Railways Corporation whose multi-billion-shilling Kenya Railways Staff Retirement Benefits Scheme owns prime parcels of land in the Kenyan capital, including includes 139 acres in Makongeni, key to the realisation of the affordable housing pillar of the Big Four Agenda.

The scheme also has another 42 acres in Ngara, 25 acres in Land Mawe and another 35 acres in Muthurwa. At the Easy Coach area’s Good Shed, eight acres are available, with another eight acres at the Kenya Railways headquarters.

A mouth-watering 11 acres are in Matumbato in Upper Hill and 18 acres at the Kenya Railways Club add to the portfolio of the mad rush for Railways land by prominent people now feared keen on defrauding retirees the value that comes with it.

A total of 8.9 acres lie in Upper Hill, right opposite the British High Commission. The parcel has partially been sold. In Hurlingham, the scheme has half-acre parcel, not to mention a few others along Ngong Road.

Nairobi city county government’s urban renewal housing project has already expressed interest in land in Land Mawe, the available 30 acres in Muthurwa, a portion of Kenya Railways headquarters and the entire Easy Coach area.

The urban regeneration programme targets between 10,000 and 12,000 housing units aimed at providing decent and affordable housing to Nairobi residents, with the pension scheme primed for a humongous fortune in compensation.

The retirees previously accused City Hall of scheming with the sole corporate trustee to possess 10 of their properties in supposedly accrued land rates running to about Sh9 billion.

Documents availed to Weekly Citizen showed that Nairobi city county government was claiming Sh8.5 million in unpaid land rates last year. The contested land parcels are in Matumbato, Muthurwa, Railways Club, Ngong Road, Hurlingham, Good Shed, Land Mawe and Ngara estate in Nairobi.

Interestingly, City Hall had computed the land rates in question as from the days of the defunct former East African Railways Corporation, which was operational before independence, a development KRSRBS strongly opposes, affirming they should only pay for the period after October 2006 when the pension scheme was constituted.

Swapping of the land for the accrued land rates would have seen the pensioners lose any compensation that they expect from the government in the Big Four Agenda affordable housing.

The attempted swap hit a snag after Fokerawa officials wrote an appeal to the DCI, the Ethics and Anti-Corruption Commission, the and the Director of Public Prosecution to act on what they termed as mega corruption in the management of their scheme and secure the multi-billion shilling scheme from imminent collapse.

The DCI, DPP, EACC and the Housing PS have long responded to the officials over the matter. In a hasty retreat during the September 2018 Annual General Meeting, Olubayi informed the pensioners that City Hall had revised the accrued land rates to Sh1.5 billion.

Most of the scheme’s properties have either been sold at a throw away price or ended up in protracted, expensive court battles to the detriment of the retirees, with hundreds of millions of shillings paid by the corporate trustee in legal fees.

It is amazing how, at one point in time, some of the scheme’s property changed hands at the negotiating table when a buyer (lowest bidder) again sold it to the highest bidder before the sitting dispersed.

Still, it is interesting how the value of the pensioners land and property does not appreciate, even when property prices in Nairobi have tripled in the last five years.


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