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{
    "id": 1592126,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1592126/?format=api",
    "text_counter": 483,
    "type": "speech",
    "speaker_name": "Kikuyu, UDA",
    "speaker_title": "Hon. Kimani Ichung’wah",
    "speaker": null,
    "content": "to hear an update in their statement on where the National Treasury is on implementation of e- procurement across all sectors in government, including Parliament as an institution, since Hon. Speaker chairs the Parliamentary Service Commission (PSC). It is also an Arm of Government. Hon. Deputy Speaker, I will move on to some of the other recommendations on the opportunity cost that arises from the interest being waived, especially in the example I have seen in the Report of Kenya Airways. Government borrows money through Treasury Bills at a rate of 9 per cent or 10 per cent. It then lends the same money to Kenya Airways at 3 per cent or 5 per cent. Why does it do so? Kenya Airways can borrow from banks at 10 per cent. We are basically subsidising a private company, as much as the government is a shareholder. Therefore, we must be careful. If we borrow money to lend to another government agency or parastatal, then it must be at an equivalent interest rate or lower premium. If Kenya Airways cannot get a commercial loan at 15 per cent, why can they not pay that loan at 10 per cent, 11 per cent or 12 per cent like in a SACCO, if we borrowed it at 9 per cent? It will still be at a discount compared to the interest charged on commercial loans. This is where we lose money. As the former Vice-Chairperson and a diligent Member of this Committee, Hon. Makali, said that we continue to lose money that way. There is also the question of commitment fees that we pay for loans. The Committee has rightly noted, in their observations, that this emanates largely from loans that we have committed to but we do not allocate or appropriate money to pay the counterpart financing that ought to come from the Government of Kenya. It is in all sectors, especially the water sector. Many projects in the water sector, energy sector and a few in the roads sector need counterpart funding. Because adequate money is not appropriated during the budget-making process to pay for the counterpart funding, these loans are not disbursed yet we have paid commitment fees. At times we even pay insurance against those loans. This is money that is lost because you are not deriving any benefit from it, which you ought to. I am glad because two or three weeks ago, the Controller of Budget spoke to the same issue on commitment fees, interest and insurance that we pay on undisbursed loans. There is no loan that is signed by anybody in government. Whether it relates to energy sector or water sector or it is government guarantee on Kenya Airways loans, the National Treasury would always be aware of. If ‘one hand’ of the National Treasury is signing for these loans and ‘the hand’ is preparing the Budget Estimates, what is so difficult in them ensuring that they provide adequate resources to pay the counterpart funding and commitment fee so that we do not continue to incur costs? That is why I agree with Hon. Makali and the Committee – that, if we implement all the recommendations of this Committee, we will be better off. Hon. Makali has walked back into the Chamber. The Committee on Implementation has let us down, as a House and country. All the recommendations we make here year in, year out, it is up to that Committee to follow up. I am waiting for the day I will see the Cabinet Secretary and Principal Secretary for the National Treasury and Economic Planning, and the Director General in charge of Public Debt before the Committee on Implementation telling the country why it is taking them so long to implement TSA while the government continues to borrow its money. This is because the government largely borrows its own money. For instance, if you look at the money being held by the Kenya Roads Board in commercial banks, you will be shocked. Even road agencies that owe contractors billions of shillings hold money in bank accounts. If you look at the bank accounts of the National Land Commission, you will be shocked. There is idle money lying there. It is used by the commercial banks to trade with the government by lending it back to them, for which they pay interest. If that is not insider trading, I do not know what it is."
}