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{
    "id": 141913,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/141913/?format=api",
    "text_counter": 465,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "We also noted the issue of imprudent management of State corporations’ assets. The State corporations failed in their duties to safeguard corporation assets thereby leading to huge financial losses and sometimes human lives. Mr. Temporary Deputy Speaker, Sir, as a Committee, we noted that failure by the Kenya Ferry Services Limited to adhere to insurance policy specifications in terms of payment of premium and loading capacities of the Mtongwe I Ferry, led to the death of 257 passengers in 1994 and loss of compensation claims because of the inability of this corporation to adhere to policy conditions. We further noted that in the year 2001, when fire destroyed the Faculty of Agriculture building and Ruwenzori Hall at Egerton University, Njoro, with an estimated cost of Kshs24, 835,640 and Kshs8, 200,200 respectively, the university was exposed to lose amounting to Kshs33, 035,840. We observed with concern that it appears the management had not paid the insurance cover at the time of the fire and hence Egerton University would not have been indemnified by the loss and payment of premium. Mr. Temporary Deputy Speaker, Sir, the Committee noted the unsatisfactory manner in which Kenyatta National Hospital (KNH) invested surplus funds totaling to Kshs1,386,621,332 in banks and other financial institutions which were placed under liquidation in February 2003. These amounts, up to now, have proved irrecoverable. The Kenya Industrial Estates (KIE) banked large sums of money in financial institutions, including the Thabiti Finance Company Limited, the Pioneer Building Society, and the Cosmopolitan Building Society and was unable to recover Kshs79, 244,703.30 when the institutions collapsed. We recommend that the Chief Executive Officers (CEOs) of State corporations responsible for the corporations’ huge financial losses be severely reprimanded. We also further recommend that the CEOs of State corporations ensure prudent management of the corporations’ assets and insurance portfolios. The Committee also recommends that the CEOs ensure that the investment of funds is done in conformity with the Treasury circulars on investment of surplus funds. Mr. Temporary Deputy Speaker, Sir, from the evidence adduced, we also noted that there was serious misuse of State corporations’ assets belonging to these corporations. In this regard, the whole process of the Kenya Railways Corporation concession of train operations to the Rift Valley Railways (RVR) was mismanaged. The Committee observed that the prequalification process was faulty from inception to the final award of the concession to RVR. Rift Valley Railways is a company that never featured in the prequalification process and whose lead partner has no financial or technical capacity to undertake a national railway line. It is worth noting that at the time that this concession agreement was signed between the Government of Kenya and RVR, a company which was not prequalified or did not feature anywhere during the prequalification process, had a share capital of 2,100 Rands. This is only an equivalent of approximately Kshs21, 000. For Kshs21, 000, the Kenya Railways was transferred to RVR."
}