Kenya will not pay Sh3.05 billion being demanded by Anglo Leasing company associated to Sri Lankan businessman Annure Pereira.
At the same time, the government is preparing a supplementary budget to regularise payment of Sh1.4 billion by re-allocating funds that have not been used in the projects.
MOUNT STRONMG DEFENCE
Speaking on Tuesday during a convention organised by Leasing Association of Kenya at the Kenya School of Monetary Studies, National Treasury Cabinet secretary Henry Rotich said the government will not pay the money but mount a “strong” defence.
The money is part of a claim over controversial Flagstaff NCTC project deal entered into in 2004 at a cost of $41.8 million for National Intelligence Service.
Mr Rotich, however, justified the Sh1.4 billion payment by the government saying it would have prevented the country from floating a Eurobond meant to raise upto Sh170 billion.
“The government is preparing a supplementary budget to regularise the payment by re-allocating funds that have not been used in the projects,” he said.
On leasing facilities, Mr Rotich said the government will hire another 1,500 vehicles for the national police and county commissioners in next financial year to add to 1,200 that it took on this year.
It will also lease helicopters for police operations and medical facilities.
Mr Rotich said leasing of facilities by the government would be enhanced to improve service delivery to the public and cut costs.
“The initiative dovetails within government policy which aims at promoting lease financing to improve service delivery, deepen financial sector and grow the economy,” he said.
The Cabinet Secretary said leasing provides a means of expanding domestic capital and equipment investment in the economy while reducing costs associated with waste and disuse.
“Plans are underway to expand leasing to other assets, starting with lease of medical equipment and other plants and machinery including ICT-related equipment,” said Mr Rotich.
The two-day convention is being attended by industry players, credit providers and end-users.