A multi-billion-shilling real estate project championed by former Prime Minister Raila Odinga in Kisumu County is facing fierce opposition from local clans, who accuse developers and government officials of seizing ancestral land without proper consultation.

The burgeoning tensions threaten to derail the ambitious Ksh128 billion LV Marina housing development, earmarked for a sprawling 285-acre parcel where the defunct Kisumu Molasses Plant once stood.

At the heart of the dispute is a donation of five acres by Raila to support the government’s affordable housing program, an initiative publicly lauded by President William Ruto during a recent tour.

However, this gesture has ignited outrage among members of the Korando and Kogony clans, who deem it irregular and unlawful.

“What the former prime minister did was illegal,” asserted George Weda, the secretary-general of the Kisumu Welfare Association.

“We want our land returned as it was taken from our community in 1979 for the molasses plant. When that project failed, it should have been given back to us.”

Community elders and documents cited by the Association indicate that the land was originally acquired in 1976 by then-Foreign Affairs Minister Dr. Robert Ouko, on behalf of the Kenya Chemical and Food Corporation, under the Land Trust Act.

It was supposedly held in trust for the benefit of the Kogony and Korando people.

The Kisumu Molasses Plant, inaugurated in 1977, was envisioned as a regional industrial powerhouse.

However, residents claim its promise remained largely unfulfilled, with the facility stalling in the 1980s and remaining dormant for years.

Controversy deepened in the 1990s when the Odinga family acquired the plant’s assets through a public auction via the now-defunct Kisumu Development Trust.

Speaking at the launch of LV Marina, Raila linked the troubled history of the defunct Kisumu-based Molasses Plant to global oil politics dating back to the 1970s.

According to him, the facility was born out of a government strategy to cushion Kenya from the soaring cost of oil during the global energy crisis.

The plant was intended to process sugar industry waste into ethanol, offering a locally produced fuel additive to cut petroleum import costs. But just as the project was gaining momentum, it lost traction.

Raila claims that once international oil prices stabilised, powerful oil multinationals moved swiftly to derail the ethanol blending initiative, which posed a threat to their profits.

“The oil companies opposed the blending initiative. They preferred importing crude oil, where profits could be made on the high seas. They sabotaged the plant,” he said.

The result, he added, was the economic strangulation of a project that could have reshaped Kenya’s energy landscape and boosted local industry.

Raila defended his family’s acquisition of the Kisumu Molasses Plant, saying it was obtained legally in the 1990s through a transparent government auction in which they submitted the highest bid.

“We emerged the highest bidder when the government put the plant up for auction. But complications arose as officials said only the assets were for sale and not the land. We questioned the logic of what use were buildings without the ground they stood on,” he recalled.

Although the family paid a deposit, legal hurdles soon followed.

A court initially ruled against them, challenging their claim to the property.

However, the process was eventually reviewed, and the land was later included in a revised transaction. The Odinga family maintains that they completed a separate payment for the land, paving the way for full ownership.

With ownership confirmed, operations resumed through a partnership with a South African firm. But the revival was short-lived.

The plant faced a critical shortage of raw materials, as other sugar factories, such as Mumias and Muhoroni, had already set up their own ethanol plants, limiting the available molasses.

“We brought in molasses from Sony, Chemelil, West Kenya, even from Uganda and the Coast. But the cost became unsustainable. Eventually, we had to shut it down,” Raila explained.

Residents, however, emphatically argue that the auction molasses plant pertained only to the plant’s machinery, not the underlying land.

“Only the plant was auctioned. The land remained with the community,” Weda maintained.

He added that the Kisumu Welfare Association formally wrote to GulfCap Real Estate, a key developer in the LV Marina project, on February 3, 2025, requesting public engagement and clarification but received no response.

“We need to understand how this development will affect our lives and livelihoods. It’s our land and we have a right to be consulted,” the letter reportedly stated.

The community group has outlined four key demands: a comprehensive environmental impact assessment, genuine community participation, fair compensation for affected farmers, and a transparent land ownership audit.

They raise ecological concerns, noting that the project area is sensitive and crucial to the health of Lake Victoria.

“This is a vulnerable region and mishandling waste could poison water sources, endanger public health, and devastate biodiversity,” warned Professor Enos Okolo, chairperson of the association.

Professor Okolo also questioned the affordability of the proposed housing units for Kisumu’s predominantly low-income population.

The LV Marina project was officially launched on January 18, 2025.

Raila has defended the initiative, calling it the “most viable use” of the site following the molasses plant’s failure.

The former premier backed plans to convert the Kisumu Molasses Plant site into a housing project, saying the city’s rapid growth has made it unsuitable for industrial use.

He argued that a residential development would be a more practical and forward-looking use of the land.

With Kisumu expanding fast due to rural-to-urban migration, Raila said the need for affordable housing has become urgent — not just locally but across the country. He described the proposed project as part of a broader national agenda to address urbanisation challenges.

 

“When I served as Minister for Roads, Public Works and Housing, I introduced amendments to the Housing Act. Rural-to-urban migration is irreversible. Unfortunately, successive governments failed to plan for it; that’s how informal settlements have proliferated,” he noted.

According to Raila, the transformation of the site aligns with a vision for well-planned urban development and reflects the realities of modern Kenya.

Yet, these explanations have not quelled the discontent.

“This is our land and we were never consulted. Our rights have been trampled. If need be, we’ll pursue justice through the courts,” vowed civil rights activist Shem Kosse.

The escalating standoff between the developers and the affected clans threatens to cast a long shadow over Kisumu’s urban transformation plans, reigniting complex debates around land rights, historical grievances, and transparent development in Kenya.