The Kitui County Textile Centre is steeped in debts and financial woes, a report by the county assembly has revealed.
An inquiry by the assembly committee on labour and social welfare gave the verdict that Kicotec net current assets were negative, an indication that the facility will face liquidity challenges in the short term.
“As of February 24, 2021, Kicotec had current creditors amounting to Sh66,964,332.80 and current debtors amounting to Sh106,548,399.00,” the report prepared by the committee led by nominated MCA John Munyoki Mwinzi read.
It was on Tuesday tabled for deliberation and approval by the assembly.
According to the report, the Kitui county government-run apparel factory that last year drew national and international acclaim for mass production of face masks, ran to fiscal headwinds after transforming into a corporation last June.
“Since July last year, the entity has been operating on its own revenue with no funding from the county government,” the report says.
The report noted that in its current operations it faces challenges, particularly delays in receiving funds owed to it by various entities that have secured products from the factory.
The report slammed government departments for starving Kicotec of funds and failing to pay for products leaving the company in a financial quagmire.
“Its clients are mainly government entities and as at the date of the committee’s visit, it was owed about Sh70 million based on tenders or orders awarded to the entity,” reads the report.
During the visit to Kicotec, the report adds, the acting CEO Georgina Musembi urged the committee to approve the continued financing of Kicotec by the county government for the facility to remain afloat.
The labour committee pointed out that its members decided to launch an inquiry into Kicotec’s operation following repeated strikes by workers last year and complaints about delayed salaries.
The committee however said by the time its members visited Kicotec late last November, the salary issue had been sorted.
It noted that since 95 per cent of the workers were casuals they were grossly underpaid such that they could not meet rudimental needs.
Edited by Kiilu Damaris
