Supplementary budget of Sh12bn will pay contractors' bills

Contractors and suppliers will be paid pending bills after the Nairobi Assembly passed a Sh12 billion supplementary budget.

The Sh12 billion approved Thursday last week will cover part of the amount owed by the Executive and the Nairobi Metropolitan Services and reviewed by the Auditor General.

It was the county's second supplementary budget this year. In the first budget passed last month, Sh1.3 billion was set aside for NMS payments to contractors and suppliers.

The budget committee chaired by Robert Mbatia said the second budget demonstrated the assembly’s commitment to settle pending bills to development contractors. They have been cleared by the Auditor General and payment was directed by President Uhuru Kenyatta.

Part of the budget, Sh4.4 billion, has been allocated to pay off a Kenya Commercial Bank loan.

In November last year, the KCB Group asked the High Court to enforce collection of a Sh4.3 billon loan and interest, as directed by an arbitrator.

Acting Governor Ann Kananu's administration is facing a debt that ballooned by Sh20.40 billon in the last three years.

The county wanted to negotiate with the bank to restructure repayment by installments of Sh55 million monthly for eight years.

Another Sh1.2 billion has been set aside to pay the Kenya Revenue Authority, while Sh381 million has been allocated to NSSF.

Between October and November 2019, Sh2 billion statutory payments were made to KRA.

Mbatia said to make resources available for payments, reallocations had been made across votes in accordance with Sections 135 and 154 of the Public Finance Management Act, 2012.

The reallocation had been made from the NMS budget that declined from Sh23.2 billion to Sh11.2 billion. The budget committee said the funds could not be exhausted before the end of the financial year, so reallocation was in order.

The committee and the  assembly have been strong crusaders for the county and its latter-day brother NMS to prioritise settlement of pending bills, Mbatia said.

"This will ensure the county's credit score is bolstered while also guaranteeing those who do business with Nairobi don’t live to regret the decision,” he said.

Kilimani MCA Moses Ogeto opposed the budget, saying the committee had slashed NMS funds that could have been utilised for development.

“This is a skewed presentation and I have never seen such a budget estimate paper before. Denying NMS funds is unreasonable," he said

However, Majority leader Abdi Ibrahim Hassan said the supplementary budget was in order as the document had been placed before the house from the NMS and the executive.

“The committee has realigned the budget as the monies cannot be spent at this time of the year. If no realignments were done, the funds could have been taken back to the Treasury. But it was reasonable for the funds to go towards statutory payments,” he said.

Supporting the budget, Roysambu MCA Peter Warutere said the funds will assist the county in reducing the pending bills that have been a headache since 2017.

Eastleigh North MCA Osman Adow praised the budget, saying  payments of pending bills will fast-track some stalled projects.

(Edited by V. Graham)