The National Youth Service (NYS) has suspended several projects and reduced the number of entrants from 30,000 to 20,000 after its budget for this financial year was slashed by Sh23 billion.
Among the projects suspended due to lack of funds is the subsidised transport programme dubbed "Okoa Abiria", meant to offer Nairobi commuters cheaper transport.
NYS Director General Matilda Sakwa told the Parliamentary Committee on Labour that the agency’s management had been forced to take the drastic measures due to budgetary constraints.
“We intended to reduce the number of youths to be recruited this year to cut costs as we focus on our strategic plan, which seeks to commercialise projects to generate funds to sustain the ongoing projects,” said Ms Sakwa.
She said they had budgeted for more than Sh35 billion in the 2019/2020 financial year but they were allocated only Sh12.7 billion to run programmes, forcing them to take stringent measures to keep programmes running.
Ms Sakwa told the MPs that the institution had identified a number of projects that would be suspended until they receive adequate funds.
“We have been forced to suspend the bus project in Nairobi since we could not break even considering the cost of operations versus returns.
"The project can only be viable if we are allowed to operate with the current market fare prices of Sh70 to Sh100 per person as opposed to the Sh20 that had been set,” said Ms Sakwa.
Early this month, Auditor-General Edward Ouko said only nine of the 27 buses in the subsidised transport service were in operation with the rest grounded, and no funds had been received for the service.
She added that the project also lacked a budget allocation for maintenance and operation costs of the buses.
The Ali Wario-led committee recommended that the NYS should suspend the subsidised transport project because it was making losses and portraying the service in a negative light following conflict of interest allegations.
The NYS management was questioned after the Public Service ministry requested for Sh500 million in emergency funds to buy 50 more buses when there was no emergency.
The committee also asked the Director General to explain why the NYS management was adhering to outdated procurement rules that were amended in 2013.
The move was meant to allow 30 per cent of all government contracts to be given to three special interest groups – the youth, women and people with disabilities – in what was known as Access to Government Procurement Opportunities (AGPO).
Mr Wario said all the tenders would be scrutinised to ensure those allocated meet the AGPO criteria.
During the two-day sitting, where managements of different parastatals were questioned on the implementation of AGPO in their institutions, it emerged that committees had been disregarding tendering laws in relation to disadvantaged groups by allocating them a paltry one per cent against the 30 per cent directive.
“We are shocked to find out that a number of firms that were awarded the tenders are known to us, and even a search has indicated that directors are senior people in government and prominent business people,” said nominated MP David Sankok, one of the committee members.
“In their report, youth and women groups were short-changed with some given tenders worth a paltry Sh5,000, which is too ridiculous.”
Some of the parastatals that were grilled on the implementation of AGPO include Kenya Ports Authority and the National Social Security Fund.