The Treasury warned that hasty signing of MoUs with investors could see counties expose themselves to huge liabilities where the terms are not scrutinised. PHOTO | FILE
Counties have been warned not to enter into partnerships with investors for projects before consulting with the national government.
The Treasury said some of the devolved units were rushing into signing long-term agreements with investors who approached them with business proposals without subjecting them to competitive bidding.
“County governments have received unsolicited proposals from investors and have gone ahead to sign memoranda of understanding (MoUs) some of which are for 30 years. The law gives direction on how to deal with unsolicited investors,” said director of public private partnership units Stanley Kamau.
The director noted unsolicited proposals could only be signed without competitive bidding if a county was meeting an emergency need, if they offered a solution falling under the intellectual property platform or if they were the only ones who could do the proposed business.
The Treasury warned that hasty signing of MoUs with investors could see counties expose themselves to huge liabilities where the terms are not scrutinised.
Mr Kamau cited an example of companies that proposed to generate electricity from solid waste management programmes which required specified tonnage of waste collected daily.
County governments were exposed to liability in case they were not able to collect the set levels for power generation.
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