MPs fight powers loss in privatisation Bill


Committee on Finance and National Planning Chairperson Kuria Kimani at the County Hall Nairobi on April 20, 2023. PHOTO | DENNIS ONSONGO | NMG

MPs have rejected a section of a Bill that grants the Treasury unchecked powers to sell parastatals without the approval of Parliament.

The Finance and National Planning Committee said it would not back attempts by the Treasury to push through a privatisation plan without the approval of Parliament.

The committee chaired by Molo MP Kuria Kimani took the Treasury officials to task during the public participation in the Privatisation Bill 2023.

The Bill gives power to the National Treasury to privatise public-owned enterprises without the approval of the Parliament.

“The role of the National Assembly in the sale of parastatals cannot be taken away from the people’s representatives,” said Mr Kimani.

“This Bill takes powers of the Privatisation Commission and vests it on the Cabinet secretary. This could open doors for the Cabinet secretary to sell parastatals to persons who are already predetermined.”

Baringo North MP Joseph Makilap warned the Treasury against pushing for the enactment of a Bill that takes away powers of the Parliament in the privatisation process.

“Any Bill that does not safeguard the role of the National Assembly will not see the light of day in Parliament,” he said.

The Cabinet in March approved the Bill that seeks to fast-track the process of the sale of non-strategic, non-performing public entities to help improve the upgrade of infrastructure and the delivery of services to Kenyans.

The Cabinet argued the sale of parastatals would also tame the demand for government resources and generate more funds to drive the development agenda.

The Bill seeks to repeal the Privatisation Act 2005, which requires the Treasury Cabinet secretary to present a report on the privatisation proposals approved by the Cabinet to the relevant committee of Parliament.

The Constitution gives Parliament—both the National Assembly and Senate—substantial powers to check the decisions of the Executive.

Treasury director-general for public investments and portfolio management Lawrence Kibet told the committee that privatisation is a policy issue and the Treasury Cabinet secretary is best placed to decide the State entities.

“Once the Treasury identifies the policy direction and decides which entities will be placed under the privatisation plan, the same will be tabled before the Cabinet for approval,” he said.

“After the Cabinet gives the nod, the same will be taken to the National Assembly for approval. Once approved, the Privatisation Authority (currently the Privatisation Commission) will implement the plan.”

MPs also rejected the Bill’s proposal that seeks to deny the National Assembly an opportunity to vet and approve members of the Privatisation Authority.

The committee also took issue with the failure by the Treasury to include a clause in the Privatisation Bill, 2023 that will guide the buyback of private firms by the government as was the case with Telkom Kenya.

The government in August bought back Telkom Kenya from Helios Investments and Jamhuri Holdings at a cost of Sh6.2 billion. There is no law guiding the buyback of private companies by the government.

The Privatisation Commission has lined up 25 entities for State divestiture, including the Kenya Pipeline Company, the Kenya Ports Authority, the Kenya Tourist Development Corporation, the Consolidated Bank, the Development Bank of Kenya and the Agrochemical and Food Corporation.

The list also has ailing State millers — Chemilil Sugar, South Nyanza, Nzoia, Miwani and Muhoroni.

The programme also proposes further share divestitures by the government in listed firms, including KenGen, East Africa Portland Cement and the National Bank of Kenya.

The country went through a serious phase of privatisation in the 1990s and 2000s through the World Bank-led structural adjustment programmes (SAPs) that saw the government significantly divest from companies such as Kenya Airways, Uchumi Supermarkets, General Motors, Firestone and Mumias Sugar.

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