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{
"id": 202004,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/202004/?format=api",
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"type": "speech",
"speaker_name": "Prof. Anyang'-Nyong'o",
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"speaker": {
"id": 193,
"legal_name": "Peter Anyang' Nyong'o",
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"content": "Mr. Temporary Deputy Speaker, Sir, I was speaking in the \"conditional\". I said \"if\". If the hon. Member followed what I said - and he can refer to the HANSARD - my sentence began with \"if\". It is a \"conditional\". If the appointments at the Kenya Ports Authority are done on patron-client relationships, then performance will not improve. If they are done on merit, then, performance will improve. That is a conditional sentence. I have nothing to substantiate on that, Mr. Temporary Deputy Speaker, Sir. Mr. Temporary Deputy Speaker, Sir, let me turn to the Lake Basin Development Authority (LBDA). I will use the Lake Basin Development Authority as an example, precisely because of the importance of the development authorities in our economy. I could have used the Tana and Athi Rivers Development Authority or the Ewaso-Nyiro Development Authority. But it is the Lake Basin Development Authority whose 4272 PARLIAMENTARY DEBATES October 2, 2007 accounts for the year ending 30th June, 2000 appear on this Report. There are certain issues in this Report regarding the Lake Basin Development Authority, to which I would like to draw the attention of the House. The attention that I want to draw the House to is based on the following:- That the audit queries on the Lake Basin Development Authority arose as a result of the following issues. One, the under-funding of the development Authority. Two, inflation in terms of the Authority procuring services it cannot afford after under-funding and prices having faced inflationary tendencies. Thirdly, depreciation of the assets of Lake Basin Development Authority which had not been taken into account. Mr. Temporary Deputy Speaker, Sir, when I was the Chairman of the Public Investments Committee, over ten years ago, there was one chronic problem that was facing public corporations. There were two things. One, there was no proper accounting for their assets. Two, they were not taking into account, when they were doing their accounting, depreciation of assets. So, quite often, what may appear in their accounts were inflated values of their assets. They finally appeared in their reports as losses. The Lake Basin Development Authority - and I would like to read from the Report--- I will not be long! I quote:- \" The Committee was informed that the following factors were responsible for the Authority's poor financial performance. One, under-funding in the previous and current years leading to accumulation of debts. Two, escalation of financial cost of Kshs12 million-plus being interest on bank overdraft with the National Bank incurred in the year 1991/1992. Three, depreciation charge of Kshs27 million-plus in the income and expenditure account which is a non-cash item.\" Mr. Temporary Deputy Speaker, Sir, let me just talk about under-funding and indebtedness. That problem is chronic in most public corporations. That is why, in the end, they exist only in name and not in performance. If a public corporation like Lake Basin Development Authority submits its budget to the parent Ministry and says it needs Kshs50 million to run its affairs to deliver the services for which it exists and, finally, in the Budget, the said Authority is given money which cannot even pay its staff which it has contracted, the Chief Executive Officer of that Authority would do a very logical thing! He would go to the bank and withdraw money on overdraft to pay the staff! That is a recurrent expenditure. It has not even done the job it is meant to do - deliver development and services. So, you are borrowing from the banks using overdraft facilities to bridge your finances for recurrent expenditure. After he has done that, he would enter into a vicious cycle of indebtedness. So, when your accounts are audited, there is deficit financing at the recurrent expenditure level--- The more money that you are given will go into paying interests on bank overdrafts. You will never get out of the rut of indebtedness. So, it is not logical to call such an organisation a \"development authority\" because it does not even have resources for delivering development services because of under-funding from the Government. So, the Government has to make up its mind. Either it should establish the so-called development authorities, which are chronically under-funded and, therefore, indebted and off-load that debt to the Government when they are wound up or do away with these authorities altogether and make sure that the job of development is done by agencies other than these authorities. I am saying this because the Lake Basin Development Authority (LBDA) started off in the 1970s with very ambitious projects. However, over the years, it has not been able to deliver on these projects. It cuts down on these projects because of under-funding, and the Government keeps on blaming development authorities that do not perform. However, the chronic problem is with the Treasury itself. If you look at the Report of the LBDA, you will see that it can be used as a proto- type for all other development authorities. I would like to urge the Government to heed the Report of the PIC and make up its mind about the under-funding of development authorities and all public corporations, particularly those which are supposed to deliver on development services. October 2, 2007 PARLIAMENTARY DEBATES 4273 With those few remarks, I beg to second."
}