- KPC, KRC AND KPA had total asset base worth Sh1.18 trillion last year
- President Uhuru Kenyatta has since appointed John Ngumi to chair the ICDC board.
The National Treasury has called for the consolidation of funds and assets of three state infrastructure agencies recently collapsed into a single network via the Executive Order No. 5.
The presidential directive early this month collapsed rail, pipeline and port operations under yet to be formed the Kenya Transport and Logistics Network (KTLN), which will be overseen, by the Industrial and Commercial Development Corporation (ICDC).
In a statement, the Presidency said KTLN would leverage on the efficiencies and synergies of the four State agencies so as to achieve Kenya’s strategic agenda of becoming a regional logistics hub.
Speaking at the introductory meeting of the newly appointed ICDC board at Harambee House yesterday, Treasury cabinet secretary Ukur Yatani said the budget for three state agencies would be combined to improve efficiency.
The three-state firms are Kenya Railway Corporation (KRC), Kenya Pipeline Corporation (KPC) and the Kenya Port Authority (KPA).
''We will adopt the “single operational entity” approach. With combined revenues and other funds in excess of Sh600 billion and combined assets in excess of Sh1.18 trillion, there is the internal capacity to fund the requisite investments going forward, resulting in reduced dependency on the exchequer,’’ Yatani said.
According to Yatani, ICDC will be restructured to strengthen its capacity and re-orient it for its critical coordinating role.
President Uhuru Kenyatta has since appointed John Ngumi to chair the ICDC board.
Treasury had in May envisaged merging the state-owned financial institution with IDB Capital Ltd and Tourism Finance Corporation (TFC) to form the Kenya Development Bank (KDB).
It will also be supported to ensure that systems are overhauled and internal controls reviewed to eradicate conflict of interest, the opportunity for fraud, and mismanagement.
Kenya, like other merging economies, continues to invest heavily in and upgrade its infrastructure, devoting a significant proportion of its budgetary resources every year. Indeed, Kenya’s debt is primarily in this sector.
According to Treasury, these investments must be sweated more to give the required financial and economic return, including facilitation of internal, regional and international trade; attracting FDI and support services to improve competitiveness and lower cost of doing business.
The exchequer chief chided the three agencies for poor history on corporate governance, which he said resulted in operational inefficiencies, financial, uncompetitive cost of doing business, and even adverse diplomatic relations with regional trading partners.
''In order to reap the corporate governance dividend, corporate governance in the four corporations must be improved. The boards and management must become accountable within a clear framework of performance management,’’ Yatani said.