Chirchir decries Sh166B pending bills, Sh1T unfunded commitments in transport docket
He, however, stated that his previous docket, the Ministry of Energy, has no pending bills, except for one that is currently under litigation.
Transport Cabinet Secretary nominee Davis Chirchir has revealed that the new docket is burdened with pending bills amounting to Sh166 billion and unfunded commitments totalling Sh1 trillion.
According to Chirchir, the pending bills outlined primarily involve obligations to Chinese and local contractors.
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Chirchir disclosed the details on Friday, August 2, while appearing before Parliament's Committee on Appointments for Vetting.
He, however, stated that his previous docket, the Ministry of Energy, has no pending bills, except for one that is currently under litigation.
“In the energy sector, where I served for two years, we have one pending bill due to a court case. However, in the road sector, there is a pending bill of about Sh166 billion, with unfunded commitments around Sh1 trillion, some with the Chinese government and some with local contractors,” he lamented.
He further explained that the annual exchequer support for roads is approximately Sh55 billion, which does not cover the pending bills, currently standing at Sh94 billion, with interest and forex gains pushing the total to Sh166 billion.
"The exchequer support for roads annually is about Sh55 billion, excluding the financing of pending bills, which amount to Sh94 billion with interest and forex gains, bringing the total to Sh166 billion. Therefore, there is a job to be done, and we will have to work together given the challenge we face with the Finance Bill being withdrawn.”
To tackle the pending bills, Chirchir proposed adopting an off-balance-sheet approach, similar to the one that he implemented in the energy sector.
He asserted that, in the energy ministry, he ensured a mix of energy generation from solar, wind, and geothermal sources.
He noted that in July, both the cost of electricity and petroleum products were the lowest in the country in the past 15 months.
“Energy worked off-balance sheet. It will be of interest to note that energy deals with a budget of about $10 billion annually, all off the balance sheet. We need to avoid relying solely on the Treasury balance sheet, or we’ll face a 20-year wait to fulfil our commitments,” he said.
Chirchir also emphasised the need to avoid impractical contracts.
“We will not sign contracts for road construction beyond Sh100 million per kilometre to prevent commitments of up to Sh500 million per kilometre. It is crucial to find ways to work off-balance-sheet and ensure commitments are feasible,” he said.
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