Hon. Speaker, this is a public petition by cancer patients of the Republic of Kenya on review of the Customs and Excise Act on Railway Development Fund and cancer drugs funding in the National Budget. I draw the attention of the House to the following: Aware that the recent taxation of imports under the Railway Development Levy has included taxation on donated medicines and drugs; noting that such taxation has affected the continuous supply of Glivec donated under the Glivec International Patients Assistance Programmes by Novartis, who is based in Switzerland and Max Foundation of the USA; noting that the Glivec medicine is taken daily by cancer patients to keep blood cancer under control, failure to which they are prone to treatment breakdown, drug resistance due to mutation---

Order! Order, hon. Members! Hon. Pukose will be heard in silence!

Thank you, hon. Speaker. Hon. Speaker, the prayer of the petition continues as follows: Noting that the Glivec medicine is taken daily by cancer patients to keep blood cancer under control, failure to which they are prone to treatment breakdown, drug resistance due to mutation, necessitating the use of inadequate second line medicines, adverse side effects and ultimate death; noting that no budgetary provisions have been made under the National Health Plan to cancer medication, particularly the target therapy on chronic blood leukaemia and gastro intestinal stomach tumours that patients get; that, the situation is worsened by lack of sufficient diagnostic facilities countrywide for essential continuous monitoring and management of cancer; that, efforts have been made by way of requesting the Ministry of Finance for waiver of imported donated medicines from the The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Railway Development Levy but this has not been fruitful since the Customs and Excise Act does not provide for any exemptions under this levy; that, further efforts requesting the Ministry of Health to assist in obtaining Tasgina, which is a second line therapy for cancer patients resistant to Glivec has been unsuccessful; and noting that the issues in respect of this petition are not pending before any court of law or any constitutional or legal body, your humble petitioners pray that the National Assembly reviews the Customs and the Excise Act to allow for the exemption of donated drugs and medicines from the Railway Development Levy Framework; factors in second line medication for targeted cancer therapies in the National Budget; intervenes to have the second line medication for targeted cancer therapies included in the essential drugs list and makes a declaration to this effect during the International Chronic Leukaemia Day on 22nd September, 2014. Hon. Speaker, your petitioners will ever pray.

Hon. Members, given the nature of business to be transacted today, we may not allow comments on this petition but the petition will be referred to the relevant Departmental Committee of the House. Next Order!

Hon. Speaker, I beg to lay the following Papers on the Table of the House:- Report of the Auditor-General and the Financial Statements of Mwea Rice Mills Limited for the year ended 30th June, 2013 and the Certificate of the Auditor-General therein. Report of the Auditor-General and the Financial Statements of Kenya Water Towers Agency for the year ended 30th June, 2013 and the Certificate of the Auditor-General therein. Report of the Auditor-General and the Financial Statements of Agrochemicals and Food Company Limited for the year ended 30th June, 2013 and the Certificate of the Auditor- General therein

The Annual Report and Financial Statements of the National Environment Management Authority (NEMA) for the year ended 30th June, 2013 The Financial Statements of the Kenya Copyright Board for the year ended 30th June, 2013 and the Certificate of the Auditor-General therein

Thank you, hon. Speaker.

Yes, hon. Sabina Chege!

Hon. Speaker, I beg to lay the following Paper on the Table of the House:- Report of the Departmental Committee on Education, Research and Technology on consideration of the Kenya Qualifications Framework Bill

Thank you, hon. Speaker.

Very well! Other Committee Chairpersons are reminded that those who are considering various Bills that have been committed to them to follow suit and table their Reports, so that the House can be informed of the Committees’ views on the Bills. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Yes, hon. Alex Mwiru!

Hon. Speaker, I beg to lay the following Paper on the Table of the House:-

Report of the Departmental Committee on Lands on the resettlement of squatters in:

1. Muri Farm

2. Mathengeta, Tumutumu Riakanau Farm

3. Drek Farm and Kaseku Farm in Masinga Constituency

Thank you.

Next Order

Hon. Speaker, I beg to give notice of the following Motion:- THAT, the House adopts the Report of the Departmental Committee on Lands on resettlement of squatters in the following farms: 1. Muri Farm 2. Mathengeta, TumuTumu Riakanau Farm 3. Drek Farm and Kaseku Farm in Masinga Constituency.

Thank you, hon. Speaker.

Is there any other Member with a notice of Motion?

Linturi! Linturi!

Any other hon. Member desiring? Hon, Members, is there any other hon. Member desiring to give notice of any Motion?

Next Order!

Before I read the Statement, there is a lot about hon. Linturi. If he is not here, then I think his Motion is dead.

Pursuant to Standing Order No.44(2)(a) on behalf of the House Business Committee (HBC), I rise to give the following Statement regarding the business appearing before the House the week beginning Tuesday, 17th June, 2014. The HBC met this Tuesday at the rise of the House to schedule business for this week. This week, the House adopted Procedure and House Rules Report on the review of Standing Order No.44 on Statements and actualization of provisions of Article 153 of the Constitution of the Republic of Kenya. The Report recommends---

The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Hon. Members, if you could allow the Leader of Majority Party to be heard in silence---

Hon. Speaker, what I am saying is important to hon. Members on adoption of the House Rules Committee Report on review of Standing Order No.44 on Statements and actualization of provisions of Article 153 of the Constitution. This Report recommends that a provision be made in the Standing Orders to allow Cabinet Secretaries to attend the plenary of the Assembly. This will enable hon. Members to hold Cabinet Secretaries to account while performing their oversight role. The House will consider for Second Reading the following Bills next week:- (i) The Victim Protection Bill, 2013; the Physiotherapists Bill, National Assembly Bill No.40, 2013; the Retirement Benefits (Deputy President & Designated State Officers) Bill, No.38 of 2013; the National Drought Management Authority Bill, No.42 of 2013; the Kenya Qualifications Framework Bill, No.29 of 2013; the Private Security Regulations Bill of 2014; and the Scrap Metal Bill, 2014. All the Bills to be scheduled for consideration in the coming week include the following:-

Hon. Speaker, tell hon. Nyenze and hon. (Eng.) Gumbo that this is the august House.

Hon. Nyenze, today you are in an interesting mood.

I am sorry!

Your boss, the Leader of Majority Party is on the Floor to remind you. Other Bills to be included for consideration in the week include:- (i) The Persons with Disability (Amendment) Bill, No.43 of 2013; the Climate Change Bill, No.1 of 2014; the Kenya National AIDS Authority Bill, No.2 of 2014; and the Order of Precedence Bill, No.11 of 2014. May I urge the Committees to expedite the tabling of the reports concerning the Bills that I have read in the House to enable hon. Members to acquaint themselves with the content of the reports and the recommendations of the Committees.

The House adopted the Report of the Budget and Appropriations Committee on Estimates of Revenue and Expenditure for 2014/2015. The HBC has also given priority to a number of Committee reports for debate and adoption by the House. These reports include:- (i) The Report of the Mediation Committee on the County Governments (Amendment) Bill; the Departmental Committee on Health Report on devolution of health services; the Joint Report of the Committee on Energy, Communication and Information and that of Education, Research and Technology on the status of the San Marco Space Application Center in Malindi. I also wish to notify the House that the Cabinet Secretary for the National Treasury will present the Budget highlights for 2014/2015 this afternoon. The House will also consider the amendments to the Division of Revenue Bill, 2014 from the Senate on Tuesday, 17th June, 2014. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Finally, the HBC will meet on Tuesday, 17th June, 2014 at the rise of the House to consider business for the rest of the week. Allow me now to lay the Statement on the Table of the House.

On a point of order, hon. Speaker. Thank you for giving me this chance. It is a point of order but I rise here to be guided by you because there was a Motion which was brought here and it has not been moved. I am standing on behalf of those who signed that censure Motion to know whether it was a game or there was the intention of withdrawing it. If that is not the case, I seek your guidance if the Motion can be brought here on Tuesday next week before 3.00 p.m. so that the hon. Members who signed that Motion can deliberate on the same.

The hon. Member was on a point of order. Hon. Mongare, you have made your point, please resume your seat.

Has he been kidnapped or what?

Hon. Members, unless hon. Mongare acted in jest, it is fair that you familiarize yourself with Standing Orders and more particularly Standing Order Nos.47, 64 and 66 so that you appreciate the nature of the issue you are trying to canvass. That is in the nature of a Special Motion. If you have closely looked at Standing Order No.66, you will know from where you are sitting that you cannot do what you are purporting to request the Chair to direct. It is never done that way. Again, familiarize yourself with the Standing Orders. You rose claiming to be standing on a point of order to seek guidance and I am telling you that I am giving you that guidance. In terms of Standing Order No.66, what you are seeking to do cannot be done. If you are also paying attention to the Communication that I made here on Tuesday, 10th June, I gave the Mover three sitting days starting Wednesday morning, Wednesday afternoon and Thursday afternoon.

Hon. Members, it does not matter. You are at liberty to disagree, but that is the Communication and the ruling from the Chair. It will remain that way. It is not capable of being changed, certainly not through points of order!

Members, just read your Standing Orders. The matter is still within the purview of the person intending to move.

Next Order! The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Hon. Speaker, please, bring order. The Motion that came to the House Business Committee was by one hon. Linturi. So, now the Motion is dead.

Hon. Members, as you will appreciate, there is a format which you have given to yourselves, which is guided by your own Standing Orders and whenever you are unhappy with those Standing Orders, you are at liberty to propose amendments to them. The amendments will never happen the way that I can see you desiring. It is just yesterday that you approved amendments to the Standing Orders. So, you are still at liberty to propose further amendments, to propose some of the issues that you are now agitating for, but it will never happen through points of order. There cannot be a point of order on this matter. I have already ruled on the matter and it cannot be subject to debate.

Hon. Speaker, that Statement is not mine.

Order, Members, including the Members walking in. You must freeze! Surely, you cannot be walking right straight in front of the Speaker and you are completely oblivious that you should be frozen. Hon. Members, it is time for Statements. We will have response from hon. Pukose.

Hon. Speaker, I wish to respond to the Statement which was sought by hon. Ahmed Abdikadir, Member for Wajir West. He was seeking information on the following:-

(a) plans by the Government to harmonize the process of procurement of special drugs and vaccines;

(b) timelines for provision of the tuberculosis and leprosy vaccines to all public hospitals; and

(c) details of the 40 per cent donor support for the tuberculosis and leprosy programmes. I hope the Member is in the House and I beg to respond as follows:-

(a) Vaccines are special public health goods that require special preservation and storage conditions and hence their procurement cannot be integrated with drugs and other special medical supplies. Procurement of vaccines for public health institutions and programmes has always been harmonized through joint forecasting and quantification between the relevant national Government public health programmes and the development partners. This approach was slightly interrupted in 2013/2014 Financial Year when the Government component of support of this procurement was devolved to The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

the counties.

An attempt has been made to reverse this in the Financial Year 2014/2015 through the budgetary allocation of Kshs260 million---

Order, Members! Those ones particularly at the back row; hon. Kang’ata Irungu!

Hon. Speaker, an attempt has been made to reverse this in the Financial Year 2014/2015 Budget through the budgetary allocation of Kshs260 million as a Government contribution to joint procurement of vaccines under KAVI. This will ensure that procurement of those vaccines remain harmonized. However, Government contribution for procurement of vaccines outside KAVI has not been factored and the arrangement with development partners who provide bulk of the funding will be upset. Funds for procurement of all drugs used in the county health facilities are held by the respective counties and it is, therefore, challenging to harmonize procurement. On the timelines, vaccines for tuberculosis are distributed as follows:-

(i) From suppliers to regional depots. Previously, it was done twice in a year, but now it is done quarterly. (ii) From regional depots to health facilities, it is done on monthly basis. Lastly, there is no leprosy vaccine anywhere in the world. On details of the 40 per cent support for the Tuberculosis/Leprosy Programme, the GDF remits the cost of procurement of all pediatric first line EP medicines while the Global Trust Tuberculosis Single Streams of Funding is supporting the country with buffer stocks of other first line TB medicines for new patients, about 55,000 patient kits as well.

Hon. Members, that response by hon. Pukose will have to be read afresh for hon. Huka to seek further clarification.

Hon. Members, can those walking in take your seats? Hon. Mwiti, take your seat!

Hon. Speaker, it is once again my honour to present to hon. Members and the people of Kenya, the policy highlights of the second Budget of President Uhuru Kenyatta’s Administration. This Statement is in fulfillment of the requirements of Section 40 of the Public Finance Management Act and the Standing Order No.241 of the National Assembly.

Before I proceed, allow me to record my deep appreciation to the Budget and Appropriations Committee, under the chairmanship of hon. Mutava Musyimi, for constructively steering the review of the 2014/15 Budget Estimates. In the same vein, I wish to express my gratitude to my Principal Secretary and the staff of the National Treasury, for the excellent work done in the preparation of the 2014/15 Budget. We have framed the budget for 2014/15 against a backdrop of improving global economic prospects. The world economy is projected to grow by 3.6 percent in 2014, up from about 3 percent in 2013, buoyed by gradual strengthening of advanced economies. The growth of emerging markets and developing economies, however, continues to slow down due to new policy challenges. In Sub-Saharan Africa, growth remained robust at about 5 percent in 2013, with the economies of the East African Community Partner States expected to grow at an average rate of about 6 percent in 2014.

On the domestic front, growth prospects remain strong and resilient due to continued implementation of bold economic policies and structural reforms as well as sound economic management. Prudent economic policies have helped anchor the conditions for strong and stable growth. Fiscal discipline has led to improvement in both the external and domestic debt positions. We have been able to anchor inflation expectations down and to maintain strong supervision over the financial sector for stability, efficiency and improved access to financial services. As a demonstration of the resilience of our economy, overall economic activity expanded by 4.7 percent in 2013, despite the jitters and uncertainties of an election year, and challenges related to insecurity and transition to devolved governance.

The strong economic fundamentals, together with the renewed investor confidence, following peaceful elections of early 2013, bode well for accelerated broad- based and shared-economic growth and creation of more decent jobs for our youth.

Looking ahead and taking into account the on-going reforms and additional measures we are introducing through this Budget, we forecast our economy to grow by 5.8 percent and 6.4 percent in 2014 and 2015, respectively. This translates to a growth of 6.1 percent for the Fiscal Year 2014/15 up from 5.3 percent in Fiscal Year 2013/14.

By responding to present challenges, while staying focused on the transformation The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

agenda, the foundation upon which to build a strong economic transformation is taking shape. As part of public participation, we accorded Kenyans the opportunity to share their views on how to address the remaining challenges to unlock growth and economic development. Kenyans have responded to our call for Budget proposals and they have requested me to address, through this Budget, the issue of insecurity, the high cost of living, joblessness, protecting the poor and vulnerable and wastage in public expenditures across the entire Government. We have listened very carefully to these concerns and we intend to address them comprehensively. As such, through this Budget, we are demonstrating our resolve and commitment to addressing the concerns raised by Kenyans, while also laying a firm foundation for accelerated growth and a shared prosperity. A shared prosperity in which we all enjoy peace and every Kenyan has access to a gainful social and economic opportunity. The rest of my statement, therefore, responds to the concerns raised by Kenyans and elaborates on the key policies, structural reform measures and various expenditure programmes proposed to unlock our economic potential. The proposed measures are designed to facilitate the private sector take its rightful role as the engine of our economic transformation. Allow me to build on the President’s State of the Nation Address, by briefly summarizing the six critical thematic areas of the Financial Year 2014/2015 Budget that will address concerns raised by Kenyans as well as further fortify the platform for accelerated inclusive growth: First, to enhance business environment for job creation, we must address vigorously the issue of insecurity. Equally important is the need to maintain macro-economic stability and implement key structural reforms to reduce the cost of doing business. I will elaborate more about these measures, which are aimed at encouraging innovation, investment, growth and expansion of economic and employment opportunities. Second, to improve our productivity and competitiveness in the domestic and international markets, we are developing an elaborate and modern transport and logistics network. This will include construction of a standard gauge railway, an urban commuter railway, modernizing our seaports and airports, improving our road networks and expanding energy and water supplies. These measures are expected to boost economic growth and reduce unemployment. Third, to reduce the cost of living on a long-term basis, we are transforming . agriculture in order to ensure food security. Increased food supply will drive down food prices and lower the cost of living for every Kenyan. In addition, the expansion of agro- processing will foster export growth and support other sectors such as manufacturing and tourism.

Fourth, to protect the poor and vulnerable and to sustain long-term growth, we need to ensure the fruits of our growing economy are shared equitably. Accordingly, we are investing more resources to enhance the quality and accessibility of healthcare services and education. We will strengthen our social safety nets to ensure those less well off are also taken care of in order to reduce the financial burden on households. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Fifth, to reduce unemployment among our youth and women, it will be critical to provide access to affordable credit, while at the same time encouraging entrepreneurship and prioritizing skills development. Sixth and finally, we shall endeavor to strengthen devolution so as to facilitate efficient delivery of services to our people and help counties become the centers of a shared growth as envisioned under Vision 2030. With that summary, allow me now to provide more details on the Government’s agenda for the forthcoming fiscal year.

At the top of our first thematic area is improving the business environment, is enhancing security. Without security, the economy will not grow and our objective of creating jobs for everyone will remain elusive. Therefore, through this Budget, we have continued to prioritize the strengthening of our security system. In the current Budget ending June 30th this year, we initiated a security modernization programme and allocated substantial resources to the National Police Service and Kenya Defense Forces for infrastructure development, acquisition of armory, communication equipment, lease of 1,200 motor vehicles and for capacity building. I am pleased to report that implementation of these measures has progressed well.

In the 2014/15 Budget we are building on the measures already initiated in the current financial year. Accordingly, I have proposed to allocate Kshs66.2 billion for policing services, Kshs71.3 billion for Kenya Defence Forces and Kshs17.4 for the National Security Intelligence. Among the key interventions under the security are as follows: KShs.6.7 billion for leasing of 2,700 motor vehicles and aircraft for security to enhance ground and aerial crime patrol and response; KShs.3.3 billion for enhanced security operations; KShs.2.9 billion for recruitment and training of additional 10,000 National Police officers; KShs.3.5 billion for security equipment upgrade and modernization; KShs.1.6 billion for Police Medical Insurance Scheme; KShs.1.8 billion for Control and Command Centre to enhance policing; KShs.1.3 billion for National Police Service officers’ housing and development of additional housing units under a PPP framework – empowering officers to live in dignity;. Kshs.1.8 billion to deter poaching and save our heritage; KShs.1.3 billion for enhancing security at the Jomo Kenyatta International Airport (JKIA); and we are also rolling out surveillance system throughout the country to deter criminals and terrorists.

Hon. Speaker, these measures, together with enhanced efforts of our security personnel, should go along way to address the concerns raised by Kenyans regarding their safety and should offer a peaceful and conducive environment for business activities. The importance of macro-economic stability in sustaining long term investment, economic growth and development cannot be over-emphasized. As such the Government will continue to pursue prudent fiscal and monetary policies that are supportive of low inflation, low and stable interest rates, and stable exchange rates, all of which are key to accelerated inclusive growth and development.

On the fiscal front, we are focusing not only on the priority programmes with the highest impact on our development objectives, but within a framework of sustainable debt and stable macro-economic environment. Accordingly, we are strengthening revenue collection efforts, containing the growth of total expenditure and eliminating unproductive expenditures while gradually shifting composition of expenditures from The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

recurrent to capital expenditure and;to reduce wastage in Government spending and entrench efficiency, effectiveness and accountability in public finances, we intend to take the following measures:-

First, we are going to rationalize our expenditures and assure efficiency and value for money. To this end, we will roll-out e-Procurement by making operational the Procure-to-Pay module of the Integrated Financial Management System (IFMIS). Henceforth, all Government procurement will be done electronically, and the days of inflated prices will be a thing of the past. To entrench accountability, a new Procurement law will shortly be submitted to this House;

Second, we are implementing a Digital Government Payment Gateway to efficiently link Government payments and service delivery. This will not only make it easier for Kenyans to pay for services delivered, but will also seal loopholes and raise more revenues;

Third, we will operationalize the Treasury Single Account and an institutional framework for effective cash-flow management established at the National Treasury to assure prudence and economy in the use of public resources as well as timeliness in Government financial transactions;

Fourth, we will develop and enforce cost benchmarks for all projects and consumables to assure value for money. At the same time, we are strengthening capacity of budget performance and setting a performance benchmark for absorption of development budget of at least 80 percent. Similarly, we will undertake expenditure tracking and value for money audits to ensure accountability and efficiency and effectiveness in the use of public resources at both levels of Governments. As part of efforts to combat waste, the budget allocations for consultancy services, travel and hospitality have been curtailed, which will contribute to savings going foward; and, Fifth, and finally, we are also providing resources and strengthening the institutional capacity of the public finance management oversight agencies, namely, the National Treasury, offices of Controller of Budget and Auditor General as well as the Public Procurement Oversight Authority, to further enhance efficiency, effectiveness, transparency and accountability in the use of public resources.

On the revenue side, we are aware of the need to mobilize more domestic resources for our transformation agenda. Therefore, we will strengthen revenue collection effort by bringing into the tax net all potential taxpayers. This entails implementing reforms to enhance revenue administration capacity; simplifying and modernizing tax legislations; and leveraging ICT to enhance tax compliance. Further, as directed by His Excellency the President during the 2013 Taxpayer Day, we have finalized the Draft Inland Revenue Agency Bill and Customs and Border Services Bill, and we shall shortly submit them to this House. The enactment of these two Bills and subsequent re-organization of Kenya Revenue Authority will, ultimately, enhance capacity of our tax administration.

We are also deepening structural reforms through this Budget in order to improve efficiency and total factor productivity in order to facilitate private sector growth for more jobs to our youth.

First, we are deepening financial sector reforms to create a vibrant, accessible, efficient and globally competitive financial sector that promotes high levels of savings to The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

finance our transformation agenda. One of our key objective in this regard will be to operationalize the Nairobi International Financial Centre; Second, we shall submit to this House in 2014, a new Central Bank of Kenya Bill, the Financial Services Authority Bill and subsequently, all the financial sector regulatory Bills. Thereafter, we shall seek to establish a broader framework including the National Treasury, Financial Services Authority and Central Bank of Kenya to coordinate overall financial stability in the economy.

These measures, together with other measures proposed by the Committee on Interest Rates that were recently announced, including introducing the Kenya Bank Reference Rate (KBRR) and the transparent disclosure of bank charges through the Annual Percentage Rate (APR), are expected to drive average interest rates downwards, thus making credit affordable and accessible to as many Kenyans as soon as possible.

Third, we are committed to making it easier for all small scale businesses to start business, acquire trade permits, register property, access credit, file and pay taxes and trade across counties and countries so as to position them as creators of new jobs and new products. In this regard the e-Registry will be made fully operational in the Financial Year 2014/2015 to enable small scale businesses to apply, pay for and acquire licences for their business with ease.

Fourth, we will also rationalize all regulatory fees and the other charges and establish an institutional framework for the management of their imposition and variation. This will safeguard and encourage growth of investments and businesses throughout the country. Further, we have made provision for the establishment of a state of the art one-stop-investment-shop and expansion of the one-stop public service centres, popularly known as Huduma Centers, to make it easier for all investors to set up businesses; and finally,

Fifth, we are taking the war against corruption a notch higher. The institutional capacity of the Ethics and Anti-corruption Commission and the Office of the Public Prosecutor will be strengthened in order to enhance economic crime investigation, prosecutorial and recovery of corruptly acquired assets. Reducing corruption will lower the cost of doing business and help create jobs.

( Applause )

Regarding the second theme on infrastructure, as I have already stated, we are investing in first class transport and logistic network to reduce the cost of doing business, improve productivity and enhance our overall competitiveness as a country. In this context: First the construction of a standard gauge railway line from Mombasa to Nairobi has begun---

( Applause )

First, the construction of a standard gauge railway line from Mombasa to The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Nairobi has begun and is scheduled for completion and commissioning in 2017. For this, I have allocated Kshs.22.9 billion to be raised through the Railway Development Levy (RDL), in 2014/2015 Budget. This is, in addition, to the amounts already collected under the RDL Fund and loans from the Peoples Republic of China; Second, we will also shortly workout modalities for financing the Nairobi to Malaba section with a branch line to the shores of Lake Victoria, to link the Port of Mombasa with the hinterland, provide efficient connectivity with our regional neighbours and position it as a preferred port of choice; Third, we are also finalizing modalities for the financing of the Jomo Kenyatta International Airport Commuter Rail to hasten movement of passengers to and from the Airport.

Fourth, we shall shortly commission terminal 4 and commence work on the Greenfield project for the completion by 2017 so as to position Nairobi, Jomo Kenyatta International Airport as a regional aviation hub. In addition, we are also expanding other airports in the country. In this connection, I have allocated Kshs.1.65 billon for on-going upgrading of Kisumu and Isiolo Airports and construction of three new airports in Mandera, Malindi and Suneka.

( Applause )

Fifth, through a Private Public Partnership, we are investing in regional crude oil pipeline as part of the strategic positioning for the oil transportation business. We will, also under PPP framework, develop the transport components of the Lamu Port and South Sudan-Ethiopia Transport, commonly known as LAPSSET Corridor project; Sixth, we are also continuing to expand our road network to ease movement of goods and passengers and encourage growth of commerce across the country. In this regard, I have allocated:

(i) Kshs.41 billion for completion of the on-going roads throughout the country;

( Applause )

(ii) Kshs.22.4 billion for roads maintenance to ensure our roads are usable

throughout the year;

(iii) Kshs.42.3 billion for other major roads construction especially those

connecting Kenya with neighbouring countries to facilitate trade; and

(iv) Kshs.1 billion towards decongestion of road junctions in Nairobi for faster

flow of traffic;

(v) Kshs.10 billion for other new roads we plan to construct beginning Financial

Year 2014/2015 under an Annuity financing approach; and

Seventh, to further expand energy production and lower energy prices for

industries and households, I have allocated:

(i) Kshs.10 billion for development of cleaner and affordable geothermal energy;

(ii) Kshs.23 billion towards investment in power transmission to reduce technical

losses; and The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

(iii) Ksh.10.6 billion to expand access to power in the rural areas so as to spur

growth of enterprises and employment.

Hon. Speaker, without a deliberate and strategic determination to address the productivity challenges in the agricultural sector and reverse the decline in our exports through value addition, our third thematic goal of accelerating inclusive growth for economic transformation will not be achieved. A sustainable economic transformation strategy must, at the initial stage, embrace sectors in which majority of our people derive their livelihoods. Agriculture is best positioned to open up opportunities across the country and sustain equitable development and prosperity. This will largely depend on unlocking the potential of the sector through active participation of the private sector, through value-chain. The expansion of agricultural output will also increase food supplies, reduce food prices and bring down the cost of living, create employment and promote overall rural development. Through this Budget, we are rolling out a model farm covering 10,000 acres, as part of one million acre irrigation project at Galana Ranch.

( Applause )

Concurrently, we are engaging with financial institutions and development partners to establish and Agri-Business Fund, which the private sector can access in order to fast track implementation of one million acre irrigation project and agricultural transformation ventures, throughout the country. The financial institutions have indicated willingness to leverage Government’s seed capital by a scale of one to ten.

To ensure full realization of food security and lower food prices, I am allocating Kshs.9.5 billion towards the on-going irrigation projects. This will include Kshs.3.5 billion allocation to the Galana Irrigation Project; Kshs.3 billion for inputs subsidy including fertilizer; Kshs.2.7 billion for Strategic Grain Reserves; Kshs.1 billon for fisheries development; Kshs.700 million for the revival of Kenya Meat Commission.

( Applause )

In order to create more employment opportunities in the sector, I have allocated Kshs.300 million for the revival of the Pyrethrum sector and another Kshs.300 million for establishment of Free Disease Zone.

Considering the challenges of drought and floods we continue to face as a country, we have once again prioritized flood control and water harvesting. In this regard, therefore, I have allocated Kshs.8.2 billion for construction of water pans and dams, Kshs.4.1 billion for water supply and sanitation and Kshs.1.5 billion for environmental protection, conservation and management. I have also provided Kshs.500 million for completion of multi-purpose dams that were started under the economic stimulus programme.

Under the fourth thematic area of sharing growth, the Government has made tremendous progress in providing universal access to education, but there are concerns on the quality of education and the high number of pupils dropping out of school, with no clear alternative access to acquisition of life long skills to enable them to find jobs. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Through this budget, I have proposed measures to enhance the quality of education and build skills as follows: First, to improve quality of our education and ease the financial burden on the shoulders of many households with school going children, I have increased allocation for free tuition in secondary schools by 33 percent to Kshs.28.2 billion.

( Applause )

I have also increased by 33 percent allocation for free primary education to Kshs.13.5 billion. This will make primary schooling and secondary education, truly free within the next three years. I have also provided Kshs.2.3 billion for the school feeding programme and Kshs.400 million for sanitary towels to ensure that no children misses out on school, due to poverty;

Second, we recognize that as enrolment increases each year, supportive facilities and resources including teachers will also need to be increased proportionally. We have therefore, allocated Kshs.600 million for up-grading of national schools that started under the economic stimulus project and another Kshs.2.3 billion for recruitment of an additional 5,000 teachers. I have also proposed allocations of Kshs2 billion and Kshs5.5 billion for promotion of teachers and implementation of second phase of commuter allowance respectively; and,

Third, improving quality and making our educational system accessible to all school going children through a comprehensive e-learning programme remains a priority to this Administration. As such, through this Budget we are once again allocating a total of Kshs17.4 billion for e-learning, including laptops for our children, building capacity of teachers and rolling out computer laboratories for Class 4 to Class 8 in all schools throughout the country. This will be in addition to Kshs320 million I have provided for the purchase of computers.

Hon. Speaker, we have achieved notable progress in health care, but maternal and infant mortality, together with new health challenges are putting pressure on our health care system. As His Excellency the President has committed, we are empowering mothers and infants to enjoy the right to live. Working with county governments, we are extending this empowerment to every Kenyan by investing in access to modern and well equipped health facilities and well trained and motivated health care workers.

Hon. Speaker, in consultation with county governments we are developing a programme for health care infrastructure upgrade and equipment modernisation, recruitment of more health workers especially community extension health care, expansion of training facilities, development of systems to support and expand health care services and sanitation at community level, as an integral part of our health care policy.

Hon. Speaker, we have allocated Kshs700 million for free access to basic health care in health centres and dispensaries across the country, and to further support universal maternal health care, we have allocated Kshs4 billion for free access to maternal health care by our mothers.

Hon. Speaker, we have also provided for the following interventions in the health sector: Kshs3 billion for lease financing of health care equipment to enhance service The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

delivery; Kshs3 billion for Kenya Medical Training Colleges; Kshs8.4 billion for Kenyatta National Hospital; Kshs5.2 billion for Moi Teaching and Referral Hospital; Kshs1.7 billion for Kenya Medical Research Institute; Kshs2.4 billion for doctors/clinical officers/nurses internsip programme; and Kshs300 million for informal settlement health care programmes.

Hon. Speaker, to forestall any leakages in the health care supply chain, an efficient, effective and accountable framework for the management of public resources and medical supplies at the facility level will be put in place. Hon. Speaker, as the economy is transformed, we recognise that while some sectors will strive, others may suffer welfare loses arising from the transformation. It is for this reason that last year we allocated Kshs13.4 billion to cushion these vulnerable groups. In this Budget, I am going a step further to propose additional resources to cover more vulnerable persons such as orphans and vulnerable children, elderly persons, extreme poor in urban areas and persons with disability. Accordingly, I have set aside Kshs7.2 billion for orphans and vulnerable children; Kshs4.9 billion for older persons; Kshs800 million for those with extreme disability; Kshs300 million for other persons with disability under coverage of cash transfer, Kshs300 million for rehabilitation of street families, Kshs500 million for insurance cover for persons under the social safety net programme, Kshs800 million for the Child Welfare Society, Kshs400 million for Presidential Secondary School Bursary Scheme for orphans, poor and bright children and Kshs600 million for resettling the Internally Displaced Persons (IDPs).

Hon. Speaker, in short, by expanding agricultural output, subsidising fertiliser, investing in infrastructure to reduce cost of doing business, reducing the out of pocket expenses for education and health care and by significantly expanding the social safety nets for the poor and deserving Kenyans, we have responded to those Kenyans who pleaded that we address the high cost of living and protect the vulnerable. Hon. Speaker, our fifth thematic area is on employment of our youth and women. Kenya is endowed with agricultural and natural resources, a prerequisite for industrialisation. Facilitating growth of the manufacturing sector will move our agriculture and natural resources up the value chain and diversify our exports. In particular, our programme on agriculture lays the foundation for industrial take-off as we facilitate the private sector to actively participate in agro-processing and manufacturing inputs such as equipment, machinery and parts.

As we construct the railway line from Mombasa to western Kenya, we will also develop industrial parks at strategic locations along the railway line. These industrial clusters will be centres for driving value addition and innovation. But even as we await their completion, I have proposed an allocation of Kshs3 billion and introduced reform measures to revive and make operational, at higher capacity, industries in the textile and leather sub-sector. We are also going to revamp the Numerical Machines Limited to make it a regional hub for railway parts and maintenance services. Hon. Speaker, I have noted with concern that a number of public agencies continue to purchase goods from outside the country, even in cases where such goods are manufactured locally. This is despite the mandatory requirement in the Public Procurement Disposal Regulations of 2013 which compels all international suppliers and contractors to source at least 40 percent of the tender requirements from local firms. This The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

practice is unacceptable and must stop forthwith. Public resources, whether sourced domestically or externally, must be applied optimally to promote local content and spur industrialisation. In the same vein, I call upon the private sector players to also demonstrate their patriotism by buying Kenya’s products in order to facilitate expansion of our industrial base and create more jobs locally.

Hon. Speaker, unemployment, especially among the youth and women remains a major challenge to our development and social stability. Through this Budget, we are building on the on-going youth and women support initiatives to further encourage entrepreneurship, innovation and creativity of the young people. Skills development and access to credit will be given priority to enable this group to be the dynamic drivers of growth and employment creation.

Hon. Speaker, as a Government that cares deeply for the youth and women, we are facilitating expansion of credit access so as to afford the financial capability to pursue entrepreneurial opportunities and scale up their small businesses.

The Uwezo Fund, Youth Enterprise Development Fund and Women Enterprise Fund will be rationalised into an efficient and well capitalised Fund to sustain the ever growing demands of our youth and women. In the meantime, I have allocated Kshs300 million to the Youth Enterprise Fund, Kshs200 million for operations of the already established Kshs 6 billion Uwezo Fund and KSh.200 million for the Women Enterprise Fund.

To further empower the women and youth through this budget, I have allocated KSh.8.1 billion for the recruitment and training of 21,870 youth to the National Youth Service so as to catalyze a transformative youth empowerment program in Kenya. To further empower the women and youth through this Budget, I have allocated Kshs.8.1 billion for the recruitment and training of 21,870 youth to the National Youth Service so as to catalyse a transformative youth empowerment program in Kenya.

Hon. Speaker, through this transformative programme, we will inculcate civic competence and impart specialized skills to uplift the unemployed and disenfranchised youth of this country. We expect the 21,870 youth to work in community development projects which will recruit, train and supervise another 227,670 youth in various National Youth Service (NYS) initiatives such as dam construction.

To ensure that our children remain in institutions of learning to gain knowledge and skills for a better tomorrow, I have allocated Kshs6.4 billion for technical training institutes, Kshs5.7 billion for higher education loans and Kshs55 billion for university education. In addition, I have provided Kshs540 million for instructors of village polytechnics, which should go a long way to complement the work being done by county governments.

As we devolve more resources to the counties, it is imperative that these resources are utilized prudently to optimize their impact on service delivery and the welfare of our people. In this regard, under the sixth thematic focus on ensuring success of devolution, we will work closely with the county governments and co-ordinate the implementation of our development programme. We will also facilitate the counties in strengthening their public financial management systems in order for them to realize value for money in the use of public resources.

The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Hon. Speaker, to empower counties in the performance of devolved functions and to facilitate economic development in counties, a total of Kshs226.7 billion has been allocated to the county governments in the 2014/2015 Financial Year as shareable revenue. This translates to 43 percent of the most recent audited revenues approved by Parliament and is well above the 15 percent minimum mandated by the Constitution.

Hon. Speaker, the Kshs3.4 billion Equalization Fund in 2014/2015 Financial Year will be used to provide basic services including water, roads, health facilities and electricity to marginal areas in order to bring these services in these areas to national standards in line with our constitutional requirement. This fund will be shared by 14 marginalized counties which were identified by the Commission on Revenue Allocation. In addition, to support development and create jobs at the local level, we have allocated Kshs28 billion for Constituency Development Fund (CDF) and another Kshs2 billion for affirmative actions for social development. These together translate to an average of---

Order! Order, hon. Members!

Hon. Speaker, these together translate to an average of Kshs100 million per a constituency for various projects that impact directly to the lives of our people. As before, I expect the hon. Members to provide effective oversight of these resources so that we can achieve faster and equitable regional progress.

Hon. Speaker I am aware of the recommendations of the Budget and Appropriations Committee laid before this House on 4th June, 2014, which proposed realignment of the Budget submitted by three arms of Government. Key among these recommendations are:- Enhancement of the allocation to CDF by Kshs5 billion bringing the total allocation to Kshs33 billion.

Hon. Speaker, there is an additional Kshs5 billion to cater for strategic interventions arising from the public consultation of the Budget; allocation of Kshs1.2 billion for the construction of the Ronald Ngala Utalii College and Kshs1 billion towards the completion of the Chemosusu, Kiserian and Umaa Dams. There is also an allocation of Kshs1 billion for upgrading the Narok-Sekenani-Masai Road to bitumen standard; allocation of Kshs600 million for the special economic zones; allocation of Kshs460 million for Konza Technopolis Development Authority and an allocation of Kshs300 million to the office of the Auditor-General.

Hon. Speaker, the adoption of these additional expenditures leaves a financing gap of Kshs10 billion. In this regard, I will shortly be seeking Cabinet’s guidance and also engage the National Assembly on measures to close this gap as we reflect the changes in the Appropriation Bill for 2014/2015, Financial Year. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

Hon. Speaker

Hon. Members, I will give this chance to hon. Musyimi, the Chairperson of the Budget and Appropriations Committee to make a few remarks.

Hon. Speaker, I much obliged. Allow me, on behalf of the National Assembly of the Republic of Kenya and on my own behalf to express appreciation to the Cabinet Secretary, National Treasury, Mr. Henry Rotich, for giving us the Budget Policy highlights. Indeed, it has been a very busy year. We have worked very closely with him and his office since around August last year and I know that the Committees of the House with the respective Cabinet Secretaries have also put their hand to the plough and I express my own appreciation for this close collaboration between the National Assembly and the National Executive. During the days when we were looking for a new Constitution in the 1980s and 1990s, a lot was said about separation of powers between the organs of Government but I do not think enough was said about the interdependence between the organs of the Government. I think the fact that the National Assembly, the body that legislates, oversights and represents has worked closely with the body that is given the mandate to manage our resources and wealth, it is a very good thing.

Secondly, the Budget Policy highlights are a representation of a very bold manifesto by the President, Hon. Uhuru and his Deputy, Hon. Samoei; a manifesto to grow, stabilize and transform this society. We are glad that that has been captured by the Budget Policy Statement for this coming financial year. When we last saw the President, as the Budget and Appropriations Committee, we raised our concerns, as indeed, others had done with regard to the laptops for children. Our view The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.

was that what is needed are computers in primary schools. We want to thank the President that he has pronounced himself on the matter with finality through his Cabinet Secretary. He promised us that he would act before the end of this Financial Year and we thank him for following through with his word. I cannot help, but I am tempted to say that we are very glad to see Ms. Ann Waigure here because the Uwezo Fund falls within her docket. I was in my constituency this week on Monday and the constant complaint is that our youth and women are getting money, but men over 35 years have been left out. We would like to see that change when it comes to what you call and likely so, access to affordable credit.

As I close, we look forward to discussing the Finance Bill on how to raise revenue under the able leadership of my colleague, hon. Benjamin Langat, the Chair of that Committee. We are very glad to be here. We can only hope that the county governments will also pick something from the process that is going on between the national Assembly and the national Executive. A lot of work needs to be done on that particular platform. With those few remarks, I beg to thank you.

Hon. Members, in keeping with your amended Standing Orders, it is now time to adjourn the business of the House today. The House stands adjourned until Tuesday, 17th June, 2014, 1t 2.30 p.m.

The House rose at 4.15 p.m.