Graphic/FILE Among the Anglo Leasing-type contracts were deals to buy a navy ship, set up a new tamper-proof passports system, install new communication equipment for security forces and forensic laboratory for the CID.
By ALPHONCE SHIUNDU ashiundu@ke.nationmedia.com
Posted Monday, August 1 2011 at 22:30
Posted Monday, August 1 2011 at 22:30
The Kenyan government continues to make payments related to the Anglo-Leasing scandal against the Controller and Auditor-General’s advice.
The latest audit report shows taxpayers’ money is being spent on servicing contentious debts, including Sh20 billion related to the Anglo-Leasing series of security contracts and Sh3 billion relating to the ‘ghost’ KenRen fertiliser factory.
Controller and Auditor-General Anthony Gatumbu reports the payments have pushed the overall public debt to Sh1.17 trillion.
Some of the debts date as far back as 1971 and these have been scheduled for repayment till 2052. The amount owed to external creditors stands at Sh528 billion — half of this year’s budget.
While the Anglo-Leasing ‘loan’ is being paid off quietly following negotiations involving Treasury, the State Law Office and the foreign suppliers, Government makes no secret of its payments on KenRen for work that was never done.
The latest report for fiscal year 2009-2010 shows Treasury paid Sh949 million to the Austrian bank, Bawag, and Sh1.9 billion to a Belgium firm Ducroire over the ghost project in that financial year.
“Although the government continues to service these debts, it is a matter of concern (that money is being spent) on a project which did not take off and against which no value for money was achieved,” the Auditor-General reports.
So far, Sh3.1 billion has been spent on the KenRen project that was conceived in 1975 during the Kenyatta era when President Kibaki was Finance Minister. Mr Gatumbu has termed the payments “nugatory”.
Treasury has earmarked Sh372 million to Bawag this year, and Sh1.09 billion is listed under ‘Belgium’ under Consolidated Fund Services.
When MPs were notified that Treasury had ignored a House resolution to stop the payments, they asked Finance Minister Uhuru Kenyatta and permanent secretary Joseph Kinyua to table the details.
Parliament recommended suspension of payments on 11 Anglo-Leasing projects five years ago, but government books still show Sh20 billion as government debt that has to be repaid on the shady security contracts.
Ironically, it was Mr Kenyatta, then the chairman of the Public Accounts Committee, who pushed Parliament to stop the payments back in 2006.
Mr Amos Kimunya, who was then Finance Minister, having succeeded Mr David Mwiraria who had been forced to resign following the Anglo-Leasing scandal, promised Parliament that the government would take seriously the resolution of the House to cancel the payments. Mr Kimunya is now Transport Minister.
The audit report says the Anglo-Leasing related payments are unlikely to be knocked off the books given that the government has been meeting foreign firms to settle the debts.
Mr Gatumbu reveals that on December 23, 2009, Treasury, the AG’s Office and the Defence ministry negotiated a settlement with a foreign firm for payment of Sh1.5 billion. The first instalment of Sh742 million was paid in February last year, leaving a balance of Sh798 million.
Mr Gatumbu reveals that on December 23, 2009, Treasury, the AG’s Office and the Defence ministry negotiated a settlement with a foreign firm for payment of Sh1.5 billion. The first instalment of Sh742 million was paid in February last year, leaving a balance of Sh798 million.
The report prepared in March notes the government is discussing payment of Sh4.9 billion with one more firm.
The Auditor-General is concerned that Sh115 million had been paid to one of the five cancelled projects “relating to supply of various equipment and accessories”, only that the cash has gone down the drain as there are no records to show the supplier refunded the money.
Two suppliers have sued Government in Geneva and London forcing the AG to retain four foreign legal teams and a local accountancy firm to work out the details of the case.
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