MPs want speedy payment of Sh3bn Anglo Leasing debt
Defence and Foreign Relations Committee chairman Adan Keynan (left) consults with committee member Kiema Kilonzo (right) and clerk Julius Ariwamoi on March 17, 2012. The committee has asked the Treasury to provide Sh2.8 billion for a navy ship contract. Photo/File
Parliament wants the Treasury to speed up payment of the Sh3 billion (€26.9 million) that the government owes a Spanish shipbuilder for a contract that was part of the Anglo Leasing scandal.
Euromarine Industries had been contracted to deliver an oceanographic vessel to the Kenya Navy but payments for the contract were stopped in June 2005 after the then Governance and Ethics permanent secretary, John Githongo, exposed it as part of the multi-billion shilling scandal.
The deal was signed in July 2003 as part of 18 security contracts that taxpayers were left holding from the scandal.
On Wednesday, a parliamentary committee said implementation of the Terms of Settlement Agreement of Euromarine’s contract with the Ministry of Defence should be speeded up in line with the payment terms and the delivery schedule.
“In total, the Government of Kenya is required to pay €34 million so that the ship can be delivered by July 2. The Treasury provided €10.2 million in the supplementary budget as part payment and the remaining balance of €26.9 million has been prioritised in the Budget for financial year 2012/13," the committee says in a report.
The Government, in July 2003, entered into an agreement with Euromarine Industries to build and deliver an oceanographic vessel for the Kenya Navy.
A delay in the delivery of the vessel has been attributed to the reluctance by the Kenya Defence Force officials to take the ship citing failure by the builder to meet specifications.
Recent reports have suggested the Nigerian Navy is planning to pay $25 million to buy and upgrade of the ship. Adan Keynan led the Defence and Foreign Relations Committee in the push for payments.
The MPs wants the Treasury to provide Sh2.8 billion in another security contract, this time for military hardware due to the engagement in Somalia.
Kenyan operations have been incorporated in Amisom and the UN is expected to reimburse billions of shillings already spent in the campaign.
The committee also slashed the National Security Intelligence Service (NSIS) budget by Sh2.8 billion and reallocated it to Foreign Affairs and East Africa Community ministries.
The MPs asked the House to uphold the recommendations to cut down the spy agency’s spending “because the entity has not proved that it is accountable to the people of Kenya through Parliament.”
“The committee did not interrogate the estimates of the National Security Intelligence Service because of the previous perpetual disobedience by the director-general, Michael Gichangi, of committee summons,” said the committee in its report on the scrutiny of 2012/13 budgets for defence and other ministries under its docket.
The British government, through its High Commissioner in Kenya Peter Tiber dismissed the letter as “forged and malicious”.
The committee cut the Sh13.4 billion budget Sh10.6 billion to equal to the amount NSIS requested in the previous year.
Out of the balance of Sh2.8 billion reduction the committee has recommended that Sh688 million be given the Defence ministry headquarters for construction of housing units for 10,000 junior soldiers.
East African Community (EAC) ministry has received a boost of Sh240 million to cater for the shortfall in EAC subscriptions arising from the depreciation of the Kenya shilling.
The ministry of foreign affairs also benefited from the cash, landing an additional Sh470 million to cater for foreign service allowance to staff of various missions.
The MPs also recommended to the House that Sh800 million be allocated to the Foreign Ministry to cater for the purchase of a chancery building in New York and another Sh450 million for a chancery building in Kampala, Uganda.
The committee wants another Sh150 million reallocated from NSIS to go to the development of Kenya’s mission in Juba, South Sudan.
