Public universities are grappling with bills amounting to Sh5.53 billion in penalties and fines, arising from contract breaches, unlawful dismissals and other legal disputes, deepening the historical cash crisis for institutions of higher learning.
Disclosures by State Department for Higher Education and Research, show 10 out of 79 public universities, which shared the data, have been slapped with the bills after losing court battles as at June 2024.
The cases largely range from wrongful dismissal of employees to breaches of contracts, including failure to pay debts to suppliers and retrenched staff.
The universities have paid 11.08 percent, or Sh612 million of the bills, presenting a major contingent liability to taxpayers.
The University of Nairobi (UoN) and Moi University account for the more than three-quarters of the total disclosures in court awards, according to sector expenditure proposals presented to the Treasury, ahead of budgetary allocation for the next financial year.
The UoN, which has for years been dogged by leadership wrangles, has been fined Sh2.66 billion for breaching agreements with contractors, suppliers and employees. That makes up nearly half (48.18 percent) of the disclosures.
The biggest award facing the UoN is an award of Sh1.49 billion to Wathanangu Holdings Ltd in a land dispute in Nairobi’s Upper Hill area.
The firm won the case for ownership of the land which was initially claimed by the university and the Kenya Medical Training College.
Struggling Moi University is also facing a huge bill of Sh1.24 billion for breach of contract in a long-running dispute with Vishva Builders Ltd. The case emanates from a contract the Eldoret-based university signed with the contractor in June 1990, for the construction of a block of buildings to host the Faculty of Science at its main campus for Sh476,371,024.
The university management, however, refused to honour the contract citing possible exaggeration of costs and financial constraints and ordered the contractor to leave site by November 18, 1999.
In February this year, the university suffered a blow after Justice John Robert Wananda ordered the university to pay the Sh185, 305,011.30, in addition to the interest chargers accrued since the suit was filed 25 years ago and at current bank interest rates until the payment is made in full.
Other universities with major arrears in court awards include Kisii University which has disclosed Sh631 billion in awards and has since paid Sh175.51 million. Egerton University had by June paid Sh170.48 million out of Sh225.61 million awards for various legal breaches.
Others are Technical University of Kenya which has paid Sh9.15 million of the Sh25.22 million and Maasai Mara (Sh13.53 million of Sh16.42 million). Laikipia University was yet to pay Sh45.37 million for breaches as at last June, Turkana University (Sh21.41 million) and Bomet University (Sh4.86 million).
The penalties against illegal actions by management of universities continues to mount, despite the office of the Attorney-General warning that accounting officers may in future be sanctioned for breaching agreements with contractors and employees.
Charles Mutinda, the head of General Civil Law and Claims Section at the State Law Office, said in January this year that court awards against government ministries and departments — where the AG’s office is directly involved — were on a downward trend.
We only deal with mainstream Government; that is Ministries and Departments,” Mr Mutinda told the Business Daily.
“However, we have a few State Corporations who request our assistance and where there are awards against them, we capture the same.”
