Economy

Infrastructure projects set to resume in mini budget

rotich

National Treasury secretary Henry Rotich. FILE

Summary

  • Treasury secretary Henry Rotich said Sh93 billion, about three quarters of the Sh122 billion being reassigned, would fund ongoing projects.
  • He said that the rest of the money would help pay increased salaries for government employees, including teachers (Sh16 billion) and operations and maintenance (Sh12.7 billion).

Key public infrastructure projects are set to resume after roads and electricity agencies got back the money that was last year erroneously allocated to county governments in a mini-budget set for tabling in Parliament.

Treasury secretary Henry Rotich said Sh93 billion, about three quarters of the Sh122 billion being reassigned, would fund ongoing projects.

Mr Rotich told the National Assembly’s Budget and Appropriations committee that the rest of the money would help pay increased salaries for government employees, including teachers (Sh16 billion) and operations and maintenance (Sh12.7 billion).

Kenya Rural Roads Authority (Kerra) will get Sh16.5 billion, Kenya Urban Roads Authority Sh9.9 billion and Rural Electrification Authority (Rea) Sh7.2 billion.

Kenya Ferry Services will get Sh0.74 billion, Government Chemist (Sh0.17 billion) and Radiation Board Sh0.3 billion.

Mr Rotich told the Committee chaired by Mutava Musyimi that delays in gazettement of functions to be transferred to county governments resulted in double budgeting for the same functions at the county and national levels.

However, the anomaly has ended up being a blessing in disguise because the allocation to the counties was not recalled.

Some of the projects had stalled as contractors went without pay over the impasse between governors and the Treasury over the money.

READ: Kibaki projects hit by shortage of funds

Mr Rotich told the team that disbursement of Sh29.1 billion that had been approved for payment to contractors and public servants had been held up by the anomalies.

“This includes Sh12.5 billion for June salary for Teachers Service Commission (TSC) which was paid in July M2013, using the 2013/14 financial year budgetary allocation. This together with Sh16 billion additional requirements will increase salary provision by Sh28.5 billion,” he said.

The fresh expenditures will complicate public finances further with the funding gap expected to be filled through curbs on non-productive expenditures, including a Sh8 billion cut on projects yet to begin.

Mr Rotich said the Treasury will use Sh16 billion in the existing budget to cater for carry overs and rationalise strategic interventions amounting to Sh26 billion.

Savings will come from reallocations (Sh600 million) and Consolidated Fund Services (Sh7.3 billion) while sovereign bond and domestic borrowing, enhanced revenue measures and foreign financing will contribute Sh53.5 billion.

Mr Rotich said the government would prioritise strategic projects in order to enhance food security, improve railway network and provide water.

“The expenditure pressure is unprecedented and considering the already existing challenges in enhancing revenue measures, we have considered further borrowing and budget rationalisation measures to close the financing gap,” he said.

He said additional expenditure related to salary and allowances remained a big challenge.

“The rising wage bill is crowding out resources for essential services and economic development,” Mr Rotich said, adding that new recruitment would be frozen except for essential services.

Reclassification and creation of new parastatals would also be suspended to contain the wage bill.