42 corporations to be dissolved as 28 are merged: Report
What you need to know:
- Another state company, the Tana and Athi Rivers Development Authority, owes the government approximately Sh11 billion.
- The Government Owned Entities Bill will repeal the State Corporations Act and form the legal basis for overhauling parastatals. The Bill will be forwarded to Parliament when it resumes next month.
- The Bill was drafted by the AG’s office with input from various players and has already been considered by the Commission for the Implementation of the Constitution.
Forty-two parastatals, mostly in the agriculture sector, are proposed to be dissolved, 28 others merged while 22 could have their roles transferred to other institutions when radical reforms are implemented.
Another list of 21 corporations will be dropped from the list of State Corporations altogether.
The changes are aimed at reversing the trend where many state corporations have over the years turned into mere job opportunities for political cronies and unchecked largesse at taxpayer expense, new details of the proposals show.
So low had parastatals sunk in the eyes of Kenyans in the 1980s and 1990s that their heads were often considered “fat cats”, in reference to how much largesse they enjoyed and how little the taxpayer got in return.
Statistics show that in July 2012, at the end of the government financial year, 11 commercial state corporations reported losses rather than profits, a situation that President Uhuru Kenyatta is targeting to reverse.
For example, the Kenya Broadcasting Corporation has an outstanding debt of Sh5.9 billion after the government settled Sh9 billion of what it owes already. The debt is in respect of a 1989 modernisation project and is owed to the Japanese government.
TARDA
Another state company, the Tana and Athi Rivers Development Authority, owes the government approximately Sh11 billion.
Also cited in government reports for abject failure is the Kenya Railways Corporation whose fall has placed a huge burden on the road network, leading to congestion and far quicker wear and tear.
The plan to radically overhaul state corporations is expected to shift into the final gear when Parliament resumes and considers the necessary Bill, the President’s adviser on the Constitution Mohammed Abdikadir said.
The Government Owned Entities Bill will repeal the State Corporations Act and form the legal basis for overhauling parastatals. The Bill will be forwarded to Parliament when it resumes next month.
The Bill was drafted by the AG’s office with input from various players and has already been considered by the Commission for the Implementation of the Constitution.
“I’m happy to say that those merger documents are now ready and we are fine-tuning the Bill. We envisage having one overarching law and we are practically waiting for the laws to kick in,” said Mr Abdikadir.
