National Treasury: Senators oppose parastatals bail-out plan
Senators have joined the Controller of Budget Margaret Nyakango in questioning the National Treasury’s attempt to bail out and support the economic recovery of struggling and debt-ridden State-owned enterprises (SOEs).
The entities include Kenya Airways, Kenya Railways Corporation, Kenya Power, Kenya Electricity Generating Company (KenGen) KenGen, and Kenya Ports Authority among others.
As of the end of June 2021, the outstanding guaranteed debts to the state enterprises stood at Sh157.2 billion.
The lawmakers’ views are captured in a report on Budget Policy Statement and medium-term debt management strategy for 2021/2022financial year.
Kericho Senator Aaron Cheruiyot and his Bungoma counterpart Moses Wetangula question how monopolies like Kengen and Kenya Power can be debt-ridden despite the continuous huge investment by the government.
Huge debts
“How can Kenya Power that controls the distribution and supply of energy to Kenyans be heavily in debt, to the extent where it is now getting the attention of the Treasury?” Wetangula asks.
In the report, Kericho Senator Aaron Cheruiyot says the huge debts accrued by State agencies are exposing Kenyans to debts that cannot be explained.
Nandi Senator Samson Cherargei terms the National Treasury financing and bailout of State agencies as unacceptable.
“There are countries that do not have an airline and their citizens’ travel at will. If it is not working, let us not bother about it,” Cherargei said.
In December 2021, Nyakang’o revealed that the funds spent to bail out State parastatals could be applied to other development activities, to create assets and capital.
