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"content": "Mr. Temporary Deputy Speaker, Sir, I beg to move to following Motion:- August 8, 2007 PARLIAMENTARY DEBATES 3033 THAT, being aware that most State corporations are the economic mainstay of our country; aware that a privatization process should be preceded by a policy Sessional Paper outlining the merits and demerits of each State corporation proposed for privatization; this House grants leave to introduce a Bill for an Act of Parliament entitled the Privatization (Amendment) Bill to amend the Privatization Act in order to provide that Parliament shall by resolution approve the disposal of parastatal assets. Mr. Temporary Deputy Speaker, Sir, in 1992 the Government signed a credit agreement with the World Bank for the Parastatal Privatisation Programme. In part, the agreement reads as follows:- \"The borrower shall bring, at least, 20 public enterprises to the point of sale by December, 1994---\" As we know, the Parastatal Privatisation Programme came through the International Monetary Fund (IMF) and the World Bank, which wanted most of the parastatals in the country to be privatised. At that time, the argument, which was advanced for privatisation, was that parastatals were a drain on public resources. They further argued that parastatals were not giving good services, and that whatever we got out of their sales would be used to pay for the debts that the country had. The architects of this programme further argued that privatisation of parastatals would help to make the economy grow and enable the Government to provide better services to the people. Mr. Temporary Deputy Speaker, Sir, these were mere words. The experience which this country, and other countries, went through were to the contrary. At that time, the architects of privatisation were saying that once privatisation took place, foreign companies, which were in this country, which had money, expertise and connections, would improve and make the privatised enterprises provide more funds to the Treasury. For the last 20 years, this has not been the case. On the contrary, the country has continued to have a huge domestic and foreign debt and foreign companies have continued to wild enormous influence on what takes place in this country, and companies owned by foreigners continue to make massive profits, which are syphoned out of the country instead of being re-invested in the country. As a result, the country remains poor. In fact, Kenya is now ranked among the countries which have a very wide gap between the halves and the have-nots after 40 years of Independence. The Western governments that have been advising the Government of Kenya to privatise are themselves not doing so. In Great Britain, the water sector is publicly-owned. In the Scandinavian countries, where they have developed and their per capita income is very high, services such as the utilities are publicly-owned. Even the productive sectors are publicly-owned. In some cases, they are mixed, where both public and private capital is involved. If the most developed countries, with the most superior technological achievements, and whose Governments have a lot of money, can continue to have public ownership of such entities, what about countries such as Kenya? Kenya needs to re-examine the meaning of all this. There is a need for new policy dispensation Mr. Temporary Deputy Speaker, Sir, we have seen that even in Latin America countries, which allowed privatisation of water and telecommunication services, the prices of those services sky-rocketed, making it impossible for the ordinary people to benefit from them. This forced consumers in Bolivia to go to the streets and force the government to cancel the privatisation programme, because they were not benefiting from it. I can also cite the example of Tanzania. Around that year, the private company that had been given ownership of the water sector messed up water services in Dar-es-Salaam. So, the Government of Tanzania had to, forcefully, repossess the ownership of water services from that company and depot its directors, because the prices of 3034 PARLIAMENTARY DEBATES August 8, 2007 water became very high and poor areas of Dar-es-Salaam were not getting any water. Mr. Temporary Deputy Speaker, Sir, here in Kenya we know, for example, that last month, Nairobi Water and Sewerage Company disconnected water to the people of Mathare Valley, who could not afford to pay their bills. That was again followed by Kenya Power and Lighting Company. Now, Mathare Valley has no water and electricity. Yet, we pride ourselves as being the \"City in the sun\". That is being done because foreign companies have enormous influence over our Government. Now, our Government does not consider that such essential services, which benefit our people, are now in the hands of private companies. Mr. Temporary Deputy Speaker, Sir, it is worrying that the cost of preparing privatisation is so colossal. That is being done by experts who have been hired from abroad. Those experts give advice on how privatisation should be done. For example, the cost of preparing the privatisation of Telkom has reached almost Kshs20 billion. That is almost equivalent to the budget of the Ministry of Health. At the end of the day, when Telkom Kenya will be privatised, it will be owned mostly by foreign companies. What will Kenyan nationals gain out of that? So, I want to submit that public owned enterprise can also make some profit. I would like to give the example of Kenya Commercial Bank, which was run down seriously. It has since been restructured and making some profit. That is not the only case. There is National Bank of Kenya which was equally run down because of mismanagement and corruption. But that bank has now been restructured and it is on its way to making some profit. I can give a third example. Safaricom, which is 60 per cent owned by the public, made a profit of almost Kshs17 billion this year. The Budget allocated to the parent Ministry is merely Kshs1.7 billion. That means that, if that company is owned 100 per cent by Kenyans, the Government could be getting more revenue from it than it is getting now. That would help the economy to grow much faster than the 6.1% growth currently being experienced. Mr. Temporary Deputy Speaker, Sir, I am not saying that privatisation is bad. I am saying that privatisation should be done selectively."
}