State agency on the spot for spending Sh91 million on consultancy
By Maureen Kinyanjui |
Despite the controversies surrounding privatisation processes, President William Ruto defended the government's decision, citing a decade-old report recommending the disposal of government assets.
The Privatisation Commission, a state agency responsible for advising the government on privatisation, has come under fire after spending Sh91.88 million on consultancy services while managing to privatise just one entity over the past 16 years.
Auditor General Nancy Gathungu highlighted in a report for the period ending June 30, 2024, that despite having a fully constituted board, the commission's performance has been lacking, thus not effectively achieving its core mandate.
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Currently, 25 enterprises have been identified for potential privatisation, though the report does not disclose the specific entities involved.
The financial outlay for consultancy services has raised questions about value for money.
"This has resulted in a significant increase in the cost of contracted services acquired from consultants assisting the commission in production and updating of privatisation status reports," reads the report in part.
It remains unclear whether the Sh91.88 million spent on Transaction Advisory Services was justified.
The audit report also revealed that the Privatisation Commission is underfunded.
During the review period, the commission spent Sh344.87 million against an approved budget of Sh616.48 million, resulting in an under-expenditure of Sh271.61 million, or 56 per cent of the budget.
This financial shortfall has adversely impacted the commission's planned activities and service delivery to the public.
Additionally, the report noted that the commission has not yet transitioned its procurement systems to the e-procurement platform, further complicating its operational challenges.
Last November, the government listed several state-owned properties and companies slated for privatisation, including Kenya Hotel Properties Limited, National Oil Corporation, Kenya Pipeline Company, Kenyatta International Conference Centre, and Kenya Seed Company, among others.
Despite the controversies surrounding privatisation processes, President William Ruto defended the government's decision, citing a decade-old report recommending the disposal of government assets.
"We are spending billions of shillings sustaining companies. We have 350 public entities that just take from the budget... so we are going to make a decision," Ruto stated.
He expressed confidence that the decision to sell these parastatals would prove beneficial in the long run.
"I promise you we are going to move this country in the right direction; we are going to make the difficult, smart decision," Ruto said.
However, this privatisation initiative has sparked a public backlash. Ruto acknowledged the criticism but stressed his commitment to implementing these changes.
"We are going to make those decisions because we must change Kenya," he said.
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