Security vehicle leasing budget rises to Sh8.1bn

The Treasury will spend Sh8.1 billion to lease vehicles for security agencies in the next financial year ending June 2018, highlighting the financial burden of keeping the country safe.

The allocation is Sh2 billion more than the Sh6.1 billion set aside in the current financial year for the programme.

The government has a total of 3,280 vehicles under the leasing programme, which is expected to rise as it implements more phases.

Data from the Treasury, however, shows the government had pending bills amounting to Sh1.4 billion as at June 2016 mainly for leasing security vehicles.

“The 2015/16 bills were entirely recurrent in nature and all have been settled,” Kamau Thugge, the Treasury principal secretary, told MPs on Thursday.

In a brief presented to the National Assembly’s Finance, Planning and Trade committee, Dr Thugge said the leasing of vehicles for security agencies did not get full funding in the current financial year.

“I wish to bring to the attention of members that the National Treasury, just like other ministries, did not get full funding for its programmes and projects, some of which are critical for the overall operation of the government,” he said in a statement read out to the committee by Treasury Economic secretary Geoffrey Mwau.

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Dr Thugge told MPs that due to lack of funding the government was unable to lease more vehicles, a cost estimated at Sh1.43 billion.

The government in 2010 shifted its policy from purchasing vehicles for police operations to leasing to cut transport costs.

Leasing allows a client to use a vehicle for a fixed period, which could run up to five years while paying monthly fees as the dealer takes care of maintenance. This helps users to avoid the upfront huge capital expenditure they would otherwise incur in buying.

Defending the Treasury budget for 2017/18 amounting to Sh63.3 billion, Dr Thugge said the ministry has a funding shortfall of Sh2.3 billion for building a data centre that is in its third phase in Naivasha.

The ministry also lacks Sh875 million to finance the construction of border point offices for the Kenya Revenue Authority (KRA).

Further, Dr Thugge said the gaps were delaying the establishment of Public Procurement Oversight Authority county offices at (PPOA) at Sh765 million.

“The fiscal stance envisages continued borrowing from domestic and external sources, with the latter being largely on concessional terms ,” he said.

Dr Thugge said the government will continue to access international capital markets with a view of continued diversification of funding sources for development expenditures while at the same time reducing pressures on interest rates.

“Other alternative sources of financing the government may explore over the medium term include the Islamic Financing Instruments, the Samurai market, Panda bonds and Diaspora bond,” he said.

Funding of projects through Public Private Partnerships (PPP) initiative was also an alternative, the Treasury said.