Supplementary budget to pay Sh2.7 billion debt

Money will settle debts to small suppliers, legal fees and works, budget to be presented on Friday

In Summary

• Third supplementary budget.

• Audit committee verified the debt to be Sh5.32 billion from a disputed Sh22.7 billion. 

Nairobi County's Finance executive Charles Kerich during the pronouncement of the 2018-19 budget at the assembly, June 26, 2018.
Nairobi County's Finance executive Charles Kerich during the pronouncement of the 2018-19 budget at the assembly, June 26, 2018.

The Nairobi government plans to settle at least Sh2.7 billion pending bills by June 30.

The decision follows President Uhuru Kenyatta's order on Madaraka Day to clear all pending bills without queries be cleared before month's end.

Finance executive Charles Kerich said on Wednesday the Sh2.7 billion will be paid to small suppliers as part of legal fees and for works.

He told the Star on the phone that the figure is part of Sh5.32 billion, determined after an audit committee verified disputed pending bills.

"We are working on a supplementary budget to cover the Sh2.7 billion pending bills and a bit of the legal fees. However, we may not pay all of it, but our target is works and services," Kerich said.

The supplementary budget is expected to be presented to the assembly on Friday.

As a result of clearing bills, the county will have to halt some projects that had not been committed and roll them over to the next financial year, Kerich said.

The audit committee arrived at the Sh5.32 billion figure after verifying the Sh22.7 billion disputed debts. It reported to the executive in March.

It determined Sh2.61 billion in legal fees from the claimed Sh 15.1 billion; Sh1.2 billion for supply services from Sh 2.2 billion claimed and Sh1.5 billion from the Sh5.4 billion claimed under works.

Kerich said that the report only captured services, legal fees and works, which were the bills in dispute.

"The rest were not handled by this specific committee and we shall only focus on the three areas. However, our other debts still stand like that of KRA and Kenya Power," he said.

In April, when the assembly passed the second supplementary budget, Sh162 million was set aside to settle pending bills in legal matters.

However, according to the County's Medium-Term Debt Management Strategy for 2019-20, City Hall is said to have an outstanding debt of Sh70 billion as of December 31 last year. 

The pending bills consist of statutory debt, money owed to legal creditors, personnel emoluments, suppliers of goods and services, loans and contingent liabilities. 

The county owes suppliers, contractors and lawyers Sh10.6 billion; workers are owed Sh30.13 billion in unpaid statutory deductions; banks are owed, Sh3 billion; Kenya Power Sh640 million and retired and deceased staff Sh134 million.

(Edited by R.Wamochie)