Lawmakers criticise billions for Uchumi rescue, Safaricom
MPs expressed doubt as to whether some of the activities listed for funding in the yet to be approved mini-budget were unforeseen or constitute an emergency. PHOTO | FILE
MPs have criticised the Treasury for paying billions of shillings to Safaricom and Uchumi Supermarkets through the supplementary budget, arguing that the payments do not qualify as emergency or unforeseen expenditure.
The Budget and Appropriations Committee (BAC) said the allocation of Sh7.5 billion for Safaricom’s security surveillance contract and Sh500 million for Uchumi Supermarkets bailout should have been foreseen and factored in the annual budget.
BAC, chaired by Mbeere South MP Mutava Musyimi, expressed doubt as to whether some of the activities listed for funding in the yet to be approved mini-budget were unforeseen or constitute an emergency.
“Members questioned whether some of the activities listed for funding are really emergency or unforeseen in nature. For example, the repatriation of refugees, Uchumi bailout, Safaricom Ltd and Interior department contracts among others,” BAC says in its report on the Budget Policy Statement (BPS).
In the Supplementary Budget Estimates I, the Treasury is seeking the House’s approval to regularise payment of Sh7.5 billion to the telecoms operator in November as initial instalment for the 2014 building of a digital security system in Nairobi and Mombasa.
“The Supplementary Estimates I contains provisions to pay for the security surveillance contract between Safaricom Limited and the Ministry of Interior,” Henry Rotich, the Treasury secretary told MPs during the scrutiny of the mini-budget and the BPS for 2017/18. The payout is about half of the total Sh14.9 billion that Safaricom expects from the deal it struck with President Uhuru Kenyatta’s government.
The contract required Safaricom to install CCTV cameras in Nairobi and Mombasa that transmit real time data to a central point at the police headquarters and to connect all police stations (195) in the two cities to high-speed (4G) Internet.
The first phase of the surveillance system went live in May 2015 and Safaricom said it had trained more than 10,000 officers to operate and maintain the system.
Also in the MPs’ spotlight of unforeseen or emergency expenditure is the Treasury’s allocation of Sh500 million for the Uchumi Supermarkets rescue plan.
The cash-strapped retailer has been battling to stay afloat over challenges stemming from frequent stock outs, Sh3.6 billion suppliers’ dues, and debts to lenders amounting to Sh2.5 billion as at half year to December 2015.
The government owns a 14.67 per cent stake in the loss-making Uchumi and is the second biggest shareholder behind tier III lender Jamii Bora, which controls 14.90 per cent of the retail chain.
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