Economy

Nairobi County to start clearance of Sh3bn pending bills

City-hall

An aerial view of Nairobi City Hall. FILE PHOTO | NMG

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Summary

  • City Hall is set to clear more than Sh3 billion owed to suppliers after the High Court unlocked funds for the county’s Sh37.5billion budget.
  • The county had not been able to spend any cash from the budget after former Governor Mike Sonko went to court to block its implementation while also refusing to sign warrants to enable the controller of budget to authorise release of the funds.
  • However, acting Governor Benson Mutura has said after signing the warrants last month, the county government entered into a conditional arrangement with concerned parties to allow utilisation of some funds to keep operations at the county going.

City Hall is set to clear more than Sh3 billion owed to suppliers after the High Court unlocked funds for the county’s Sh37.5billion budget.

The county had not been able to spend any cash from the budget after former Governor Mike Sonko went to court to block its implementation while also refusing to sign warrants to enable the controller of budget to authorise release of the funds.

However, acting Governor Benson Mutura has said after signing the warrants last month, the county government entered into a conditional arrangement with concerned parties to allow utilisation of some funds to keep operations at the county going.

Consequently, the court gave the go-ahead that some funds could be used after agreeing a consent to have the court cases withdrawn.

City Hall has set aside Sh3 billion in the current financial year for payment of money owed to contractor and suppliers.

He said the National Treasury will be in charge of the payments for transparency, with garbage contractors and small scale traders top on the list of people to be paid.

Garbage contractors, who have grounded their services for lack of payments stretching close to a year, are owed about Sh1 billion.

Small scale traders, owed Sh5 million and below, have not been paid a total of Sh700 million with the rest amount set to go to contractors.

“We have begun the process of paying our service providers from this week going forward. The funds are there and it is now just a matter of organising the records and knowing who to pay first,” said Mr Mutura.

“Prior to me signing the warrants, everything had stalled and nothing much was happening as the controller of budget could not release the funds over the budget stalemate but we have now paid all our staff,” he added.

A report by the Auditor General on pending bills revealed that Nairobi County has Sh10.67 billion eligible pending bills.

Out of this, City Hall has only paid contractors and suppliers Sh1.1 billion with another Sh3 billion to the Kenya Revenue Authority in value-added tax and pay-as-you-earn arrears.

In the previous financial year ended June 30, 2020, Nairobi County Assembly approved Sh3.6 billion supplementary budget to settle the supplier and contractors’ dues but this was not effected.

This despite a directive from the National Treasury for those with pending bills of Sh5 million and below to be given priority.

The lack of payment of garbage contractors has seen the capital city’s markets, streets, backstreets, roadsides, and even city estates choking with litter.