Jubilee members walk out of a meeting called by Treasury secretary Henry Rotich in Nairobi to lobby them to back Anglo- Leasing payments. Photo/Gerald Anderson
What you need to know:
Motion withdrawn as coalition fails to rally members’ support for payments to companies.
Some MPs stormed out of meeting in protest over the Treasury’s failure to name those behind the companies, especially their local contacts.
Treasury secretary Henry Rotich says this is not the first time payments linked to the Anglo-Leasing contracts are being made, arguing that the Kibaki government negotiated payments worth Sh5.28 billion.
A Motion seeking Parliament’s approval to pay Sh1.4 billion to two companies linked to Anglo-Leasing contracts was withdrawn on Wednesday after a political backlash, putting the Treasury in a tight spot as the deadline for making payments lapsed Wednesday night.
The withdrawal by the Budget and Appropriations Committee chairman Mutava Musyimi came amid opposition to the multi-billion-shilling settlement from both Jubilee and Cord MPs.
“I wish to withdraw this Motion pursuant to Standing Order number 51,” he said. “We need more consultations before engaging further on this matter.”
On Wednesday, Jubilee coalition MPs pulled out of a meeting called to rally support for the passage of the Motion after Treasury Principal Secretary Kamau Thugge failed to unmask the faces behind the companies that won the award in Geneva and London international court of arbitration.
The meeting held at Panafric Hotel collapsed after some MPs stormed out in protest over the Treasury’s failure to name those behind the companies, especially their local contacts.
“We need to know the directors of Anglo leasing. The cabinet secretary (Rotich) appears to be under duress to ask Parliament to approve so that we can sanitise the payments,” said Antony Kimani the MP for Laikipia East.
The comments were echoed by Nyandarua MP Wanjiku Muhia: “How is Parliament coming in to approve whether we pay or not? If ghosts went to court then let them attach property.”
The Treasury warns that refusal to pay the debt will cost the economy Sh20 billion in the form of annual penalty payments of Sh96.6 million and high cost of credit on the failure to issue Kenya’s first Eurobond of up to $2 billion (Sh173 billion).
Treasury secretary Henry Rotich says this is not the first time payments linked to the Anglo-Leasing contracts are being made, arguing that the Kibaki government negotiated payments worth Sh5.28 billion.
“Therefore the allegations that this is the only government that is paying for the so called Anglo-Leasing contracts is incorrect and misleading,” says Mr Rotich in a statement that appears in the dailies on Thursday.
Two House committees endorsed the Treasury’s plan to pay First Mercantile Securities Corporation and Universal Satspace LLC the colossal amount arising from judgment that the two claimants got from Europe’s highest court of international disputes settlement.
The National Assembly’s Budget and Appropriation, and Finance committees approved the payment plan after Mr Rotich told a joint sitting of the two teams that failure to pay the debt exposed Kenya’s property abroad to the risk of being auctioned by the claimants.
The Treasury has received notification for the attachment of a number of property in Europe if the government fails to pay the Sh1.4 billion settlement that parties to the dispute agreed two years ago.
Mr Rotich argued that failure to pay the debt would make it difficult for Kenya to raise funds from the international market or do so with dire consequences.
“Without the issuance of the sovereign bond, domestic interest rates will rise for both private and public sector borrowers,” he says.
The Treasury argues that the potential benefits of paying Sh1.4 billion far outweighs the cost of forking out Sh20 billion in penalties and expensive credit in the market.
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