Contractors reel as Kiambu debts pile
Kiambu county government is grappling with payment of pending bills worth Sh2.5 billion before the end of the year.
Governor James Nyoro says the money has accumulated since 2016 when William Kabogo was still the county boss, as he conceded the county owes several businessmen and suppliers hundreds of millions of shillings for services delivered.
Nyoro was, however, optimistic the county would soon start paying out the debts after the Auditor General cleared the pending bills forwarded to her by the devolved unit.
“Now that the Auditor General has cleared our list of pending bills, we expected to start payments once the National Treasury releases the funds to us.
We are only asking our creditors to remain a little bit patient,” Nyoro told the People Daily by telephone.
Nyoro was responding to a plea by one of the suppliers to the county who now risks losing property after a bank moved to recover a loan it advanced to him.
The businessman was issued with the loan to fund a Sh7.5 million tender he had won with the County.
James Njukia, the director of Manyota Ltd, was on April 15, 2020, according to documents, contracted by the Environment department to supply 25 skips/litter bins that were immediately launched by the county chief as part of his plan to manage garbage disposal.
Honour obligations
Despite Njukia dutifully delivering the items on time with the help of the credit facility he got from Credit Bank, and even sending an invoice dated September 4, 2020, the county is yet to honour its obligations of paying him approximately Sh7.5 million.
Njukia says he has been unable to service the loan, prompting the bank to write him a warning that his assets will be attached to enable it recover the money that has continued to accrue penalties.
The grace period the bank gave him has lapsed, with the county showing no signs of making the payments.
“We Credit Bank PLC therefore do hereby formally demand the immediate repayment of the outstanding arrears and regularisation of your accounts noting that the interest and penalties continue to accrue on a daily basis on the outstanding amount until payment is made in full,” reads part of the letter signed by Grace Muthegi and Frank Muthui, from the bank’s debt recovery unit.
The letter which Manyota confirmed its recipient adds: “Take further notice that failure to comply with the demands within the next 14 days, (that is by June 10) and pay the Bank the said amounts in arrears, all your facilities shall stand due and the bank shall without further notice institute the process against yourself at your own cost and consequently incidental thereto.”
Signed contract
“I have visited the county offices several times and even called the governor and sent him messages in vain.
The banks feel I do not want to pay the loan, yet it’s because I have not received my payment from the county.
I am afraid that if my payment is not done, I will lose whatever I have because with the Covid-19 pandemic, things have been very tough on us economically,” Njukia said yesterday.
According to the award letter that was sent to the company by the county Chief Officer for Water and Environment John Mutie, Njukia was required to pay “an acceptable performance bond” of five per cent on the contract, and was required to sign the contract within seven days which he did.
Two days later, Njukia sent the acceptance letter to Mutie, saying his company “unconditionally accepted the award” and the regional government went ahead to issue him with a local purchase order (LPO) that was signed on May 12, 2020, the same day a contract was signed by the businessman and Mutie on behalf of both parties.
