Nema ignores Treasury cap directive, sets risk-based audit fees

Investors will now pay for environmental audits based on the risk levels of their projects after the sector regulator ignored the Treasury’s declaration abolishing the charges and introduced maximum caps on the fees.

Previously the National Environment Management Authority (Nema) has not been differentiating projects while charging the fees deemed punitive.

Investors have since September 2013 been paying a minimum Sh10,000 or 0.1 per cent of project cost without an upper limit, making it costlier for big ticket projects.

Before 2013, the environmental impact assessment (EIA) fees were set at 0.1 per cent of the worth of the project with a maximum cap of Sh1 million.

Treasury secretary Henry Rotich in June scrapped the EIA fees on projects to spur investments and make the country competitive.

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But the Ministry of Environment is yet to degazette the charges for Nema to stop collecting the levy, hurting investors of new projects. Nema has now categorised projects into three bands based on their levels of risk — high, medium and low — to the environment. They will attract different charges based on the 0.1 per cent of the project value.

High-risk projects such as mega real estates, roads, large hotels, mining and energy plants will attract a maximum of Sh40 million and a minimum of Sh50,000.

Developers of medium-risk projects like hotels with less than 150-bed capacity and petrol stations will pay a minimum of Sh20,000 and a maximum of Sh10 million.

Shopping centres, office blocks and stores not exceeding 10,000 square metres fall in the medium risk category. Low-risk projects like churches, bus parks and stadia will attract a fee of between Sh10,000 and Sh3 million.

“Nema is working administratively to reduce the timelines for processing environmental impact assessment (EIA) project reports from 45 days to 30 days,” the watchdog said in yesterday’s dailies.

The EIA, which is prepared by investors and reviewed by Nema, details project’s site location, its likely impacts on the environment and remedial measures, alongside the project’s de-commissioning if it has a lifespan.