The State guaranteed Sh1 billion loan from Japan Telecommunications Engineering Consultancy Service in 1989 that was to be used for expanding its radio frequency network and upgrading equipment.
The loan had ballooned to more than Sh40 billion at end of 2018.
KBC is one of the State parastatals that have defaulted on Treasury-backed loans alongside Portland Cement, Mumias Sugar and Tana River Development Agency.
The Ministry of ICT is seeking Cabinet approval to write-off a Treasury-backed loan to Kenya Broadcasting Corporation estimated at more than Sh40 billion in principal and interest.
ICT Principal Secretary Esther Koimett said that the ministry was Wednesday afternoon set to meet with the Treasury to finalise a memo that will be sent to the Cabinet before tabling it in Parliament for adoption.
Ms Koimett added that this is part of ensuring that KBC remain afloat alongside restructuring at the State-broadcaster that has faced staff unrest over delayed salaries and statutory deductions like NHIF and NSSF.
The State guaranteed Sh1 billion loan from Japan Telecommunications Engineering Consultancy Service in 1989 that was to be used for expanding its radio frequency network and upgrading equipment.
The loan had ballooned to more than Sh40 billion at end of 2018.
“What we are going to do today (Wednesday) is first request the Cabinet to approve the memo then we pass it to the National Assembly. This is the normal process of writing-off government-backed debt.”
“It is a headache to the Treasury and an audit query to the KBC side too. We are saying let us be honest because KBC will never be able to repay this loan. They have no capacity to pay it,” Ms Koimett said Wednesday.
The broadcaster has, since 2012, grappled with staff un-rests and unionisable workers last November said the parastatal had failed to pay statutory deductions to the KRA, Pension Fund and insurers.
KBC is one of the State parastatals that have defaulted on Treasury-backed loans alongside Portland Cement #ticker:PORT, Mumias Sugar #ticker:MSC and Tana River Development Agency.
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