Fresh bid to scuttle sale of parastatals

The activist wants Privitisation Act scrapped and selling of state corporations halted

In Summary

• Petitioner claims private investors will focus only on profits and not the general good

• Petition was filed on January 10 by human rights activist Gitahi Ngunyi 

An electronic sign at the entrance of KICC
An electronic sign at the entrance of KICC
Image: FILE

President William Ruto’s privatisation plan of state corporations faces fresh headwinds after another petitioner moves to court challenging the idea.

Human rights activist Gitahi Ngunyi has filed a petition in the High Court to also have the Privatisation Act that anchors the plan be scrapped, accusing the state of misusing that section of the law.

In his argument, the activist said it basically advocates for less government involvement in the economy and the same being passed to the private players.

This, he said, carries the danger of pushing Kenyans to the edge as private players will use every opportunity to make profits at the expense of the general good of Kenyans.

“It is a common knowledge that the biggest motivation for, and indeed the only way to sustain a private business, is by maximising on profits,” he argued.

“Private businesses do not exist primarily for the wider needs of the public.”

Ngunyi said in the pursuit of maximising profits, private enterprises will spend less on production, including employing fewer workers.

The government had last year lined up 11 state parastatals for sale.

They included the Kenya Literature Bureau, Kenyatta International Convention Centre, Kenya Seed Company Limited, Kenya Pipeline Company and New Kenya Co-operative Creameries.

Others are National Oil Corporation, Mwea Rice Mills, Western Kenya Rice Mills Limited, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited and Numerical Machining Complex.

But the plan was suspended last year after ODM went to court to challenge the sale, arguing there was no public participation before arriving at the decision.

"A conservatory order is hereby issued suspending the implementation of section 21 (1) of the Privatisation Act 2023 or any decisions made pursuant to that section, until February 6, 2024," reads the order granted by Justice Chacha Mwita.

Ngunyi, in calling for the scrapping of the amended Privisation Act, says the current law gives the Cabinet Secretary absolute powers in the sale of state corporations.

He argued that the CS can veto Parliament even if they fail to ratify the privitisation process as provided for in the law.

“The CS can then re-submit it back to Parliament as is for ratification,” the petition reads.

“He then only needs to wait for 90 days to lapse amidst the standoff and the programme will be deemed as ratified under Section 22(5) of the Act.”

Ngunyi further argues that the tribunal set up to handle disputes arising from the privatisation process cannot be impartial.

This as its membership is appointees of the Cabinet Secreatary, who is an appointee of the President, he said.

The petitioner also argues that the current law leaves out Senate in the in the privatisation process despite many parastatals being domiciled in the counties.

The petitioner now wants the court to declare the Act a violation of the law.

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