City Hall has not made any efforts to settle a debt of Sh3.7 billion owed to Kenya Commercial Bank.
The bank's
CEO Joshua Oigara told the county Public Accounts Committee on Tuesday that Nairobi has not responded to a number of its requests on the debt.
The county entered an agreement with the bank for help in offsetting a Sh2.4 billion loan that the defunct Nairobi City council acquired from Equity Bank.
Through an MOU, KCB reached an agreement
to provide banking services and any other financial services.
Oigara said the loan has been in default since February 2016 when the payments were supposed to take effect.
“The county has been in default since day one because the interest charged has been increasing as per the agreement reached,” he said.
Oigara acknowledged that this was the case with most counties with the adoption of the Public Finance Management Act
after the passing of the Constitution.
But he added that the county has not followed modalities upon which the loan was to be paid.
The watchdog committee chaired by Mabatini MCA Wilfred Odalo sought to find out if the loan facility was acquired through the right channels.
Committee members questioned whether the acquisition of the loan facility was approved by the Assembly as required by the law.
Odalo ordered the bank to appear before the committee next week with documents ascertaining Assembly approval for the loan facility and specific bank documents detailing the nature of the loan.
It was reported on March 3 that Kenya’s capital and powerhouse, is drowning in Sh57 billion debt.
Garbage is fouling the Green City in the Sun as 28 collection firms haven’t been paid Sh600 million for two years.
In addition, 78 public hospitals have been operating without essential drugs and supplies for more than a year, as the national supplier Kemsa has not been paid Sh255 million.
Days later, it was reported that City Hall workers risked losing out on pensions after Local Authorities Pension Trust threatened to stop the payments because of a Sh13 billion debt owed by the county government.
Details:
Also read: