By JOHN MBARIA

 SPECIAL CORRESPONDENT

AN INITIATIVE by the Kenya Wildlife Service (KWS) to standardise the leases of operators of lodges and hotels based in national parks and make them competitive has been challenged by the owners of the facilities, who say infrastructure needs to be improved and security enhanced. 

KWS says it is seeking to stem losses it has incurred from problematic leases it inherited from its predecessor, the Wildlife Management and Conservation Department (WMCD), and from operators of hotels and lodges who have defaulted on rent. 

The EastAfrican has established that previous KWS management teams did not attempt to standardise the leases or to make the rent and royalties payable to KWS competitive and that each tourist facility in the parks ended up negotiating its own type of lease. 

"KWS will also be charging royalties ranging between 12 and 15 per cent of the annual earnings of those hotels and lodges listed on the Nairobi Stock Exchange (NSE)" said KWS head of business and corporate affairs Alex Odero.

This is likely to affect TPS Serena alone as it is the only hotel chain whose stocks are traded on the NSE. 

But Serena Hotels company secretary, Damaris Angulo says the new leases the hotel group has signed with the KWS will not have any significant effect on their bottomline. "It simply means that if we earn more we will be required to pay more, but if we don't earn, we won't have to pay anything," she said. 

Serena renewed the lease for the Amboseli Serena Lodge, located in the Amboseli National Park, in September 2001, while negotiations for the lease on Mountain Lodge, located in the Mount Kenya region, have been completed and all that remains is the signing of the agreement.

Serena co-owns the lodge with other shareholders, and manages it on their behalf. 

KWS' new arrangement, which is partly prompted by improvement in revenue generated by the tourist facilities, is however not likely to transform the face of the national parks and game reserves, which suffer from poor infrastructure, insecurity, congestion and littering.

"We are the ones who have been taking care of the parks. We do not expect KWS to come in now, even with the new arrangement," said Ms Angulo. Other hotel operators who spoke to The EastAfrican on condition of anonymity, however, said the the initiative by KWS would have more impact if the latter also improved infrastructure and security in the parks. 

KWS has also established a mixture of fixed and variable lease systems where the eventual payment is set as an average of earnings made during both high and low seasons. The EastAfrican has learnt that lessees in this category will be required to pay a flexible concession ranging from 7.5 to 12 per cent of total annual earnings. 

"Though this can go up and down depending on the tourist season, we recently adjusted them downwards owing to the poor performance in the entire sector following the US travel warnings" said Mr Odero.

In parks where KWS has leased land to operators of special tented camps, the rent charged is determined on the basis of the size of the property and the number and turnover of such facilities as shops and canteens the owners of the camp have set up.

"We have also contracted a law firm, Hamilton Harrison & Mathews, who have now come up with a standard legal guide for the agreements with the private sector" said Mr Odero, adding that the document was completed at the beginning of last year. 

These moves are meant to improve the rent default rate from the 16 per cent recorded in the 2002/2003 financial year to less than 5 per cent in the current financial year.

The EastAfrican has seen KWS documents that detail all the rent defaulters, chief among whom are Block Hotels & Lodges, Garian Investments, which owns Rangers Restaurant and the Kenya Safari Lodges and Hotels Ltd.

Treetops Lodge in Aberdares National Park is the biggest defaulter with rent arrears rising to Ksh5,991,998 ($76,820). The lodge is owned by Block Hotels, a company associated with billionaire businessman Ketan Somaia, but which has since gone into receivership. KWS' notice to the Block Hotels extends way back to August 2002, before the receivers had moved in.

The other major debtor is Rangers Restaurant, which is situated next to KWS headquarters and owned by Garian Investments. The company, which is associated with Phillip Moi, son of former president Daniel arap Moi, owes KWS Ksh4,158,733 ($2,035). KWS documents show that the parastatal had terminated the relevant lease in October last year following a failure by the company to clear the arrears but "the tenant had subsequently requested KWS to reconsider the decision."

Another company that is indebted to KWS is Kenya Safari Lodges and Hotels, the proprietor of the Ngulia Safari Lodge in Tsavo West National Park and Voi Safari Lodge. Following a debt of Ksh3,298,754 ($42,291) and Ksh1,112, 390 ($14,261), respectively for the two hotels, KWS had terminated the two leases only for the latter to challenge this in the High Court. The company lost the case but has now appealed against the judgement.

Included too in the category of defaulters is the Ngulia Bandas, associated with a former minister for lands & settlement, Eliud Mwamunga. KWS negotiated to end the lease with him and is now inviting developers to revamp the existing infrastructure and commence business.

On its part, the Tsavo River Restaurant has not been running for years. Sources say that it closed down in the 1980s due to banditry and the threat of poaching and that the lessee has not been paying rent to KWS.

KWS has also not been receiving any rent from a number of leases that were given to people who have been unable to put up any premises on the sites. Included in this category are a number of facilities that do not have formal leases nor any record of rent payments. These include sites such as Old Moses Camp and Shipton's Camp in Mt Kenya National Park and Aruba and Tsavo Safari Camp in Tsavo East National Park. 

"But when KWS wanted to repossess the sites, the owners of the leases went to court which issued an injunction barring us from moving in," said Mr Odero.

A distinct category of problematic leases are those that were entered into between KWS's predecessor, the WMCD, and private companies. Some of the leases – like the one leading to the establishment of Shipton's Camp and Old Moses Camp in Mount Kenya National Park – were more or less informal agreements that gave their owner, Wanjohi Waweru, authority to set them up. The two facilities are located along the Sirimon Route used by mountain climbers and provide boarding facilities for 120. But for decades now, they have operated without a formal lease nor are there records that the proprietor has been paying any rent. 

KWS documents also show that the parastatal is embroiled in negotiations with the Meru South County Council to be enjoined in the lease agreements of four tourist facilities in Mount Kenya Forest Reserve – Rotundu Camp, Meru Mountain Lodge, Castle Lodge and Bantu Lodge. Although the KWS assumed the management of the reserve on July 24, 2000, following an announcement made in the Gazette Notice Number 48, it has not been receiving a cent from the rent on the leases. But top officials in KWS say that getting enjoined in the agreements "will be tricky." 

Getting back Lake Jipe Lodge in Tsavo East has also proved problematic for KWS. The process seems to have hit a snag in November 2001 after the lessee demanded to be paid Ksh29 million ($371,794) before agreeing to release the lodge to KWS. The matter is still pending in court. 

On its part, the moribund Kenya Tourist Development Corporation (KTDC) agreed to hand over Meru Mulika Lodge to KWS after the latter agreed to write off the entire debt of Ksh5 million ($64,102) it was owed by KTDC. This was after a seven-year struggle, following which KWS advertised the site for a new lease.

The EastAfrican has also learnt that most of the leases signed under WMCD did not provide competitive rent payments nor did they provide clear exit clauses in cases of litigation. They also failed to spell out operational regulations over waste management, pollution, park resource utilisation and benefit-sharing relationships with local communities.

As a result, the leases fetch low rent payments, some of which KWS has been unable to raise and has preferred to wait for their expiry. 

"As a result of this, we have been losing over Ksh6 million ($76,923) each month" said Mr Odero. KWS, which was formed 15 years ago, has leased out 36 privately run tourist facilities, in its 59 parks and reserves. Twenty of these facilities are said to be doing "robust business."

KWS has problems with the remaining 16; three of which it is currently contesting in court. The wildlife body has also been fighting to have leases of eight other facilities that have accumulated arrears, to be terminated. 

Recently, KWS advertised for bids from companies interested in running eight of its tourist facilities and sites. Apart from the Meru Mulika lodge whose lease to KTDC was terminated after the latter failed to meet rent obligations for more than 10 years, bids have also been invited for Tsavo Maneaters Motel and Ngulia Bandas. 

And in support of the tourism industry following the US travel warnings, KWS officials say that the parastatal has extended a one-year rent reduction on current rates to various "deserving" lodges and tented camps. This moratorium is intended to be passed on as an incentive for visitors.

Additional reporting by Vitalis Omondi in Nairobi
 

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