Acting Treasury Secretary Ukur Yattani said Narok, Tharaka Nithi and Nairobi on Monday outlined their plans to clear their bills.
Only three out of 15 counties have outlined how they will clear pending bills after the Treasury said the devolved units will not receive any development vote funds for failure to clear Sh22.71 billion effective next month.
Acting Treasury Secretary Ukur Yattani said Narok, Tharaka Nithi and Nairobi on Monday outlined their plans to clear their bills totalling Sh12.13 billion in efforts to avert the looming cash crunch starting next month.
The Treasury had said in a circular on November 22 that it will bar transfer of funds to Narok, Machakos, Nairobi, Vihiga, Isiolo, Tana River, Migori, Tharaka Nithi, Bomet, Kirinyaga, Nandi, Mombasa, Kiambu, Garissa and Baringo counties starting December 1 for failure to clear the bills.
“Three of the counties approached us Tuesday and said they will settle the debts in three months. However, no funds will be released until we are satisfied that they have clear plans on the payment of the bills,” Mr Yattani told the Senate Finance committee Tuesday.
The 15 failed to pay any of their pending bills between July and October occasioning the move by Treasury to stop their funds disbursements effective next month.
Failure by counties to clear the debts has forced many Small and Medium Enterprises (SMEs) to close down over cash flow problems, prompting a deal in June where governors made debt payment a priority in the current year.
Under the Treasury directive, the 15 counties will not get any cash for development projects.
“No conditional grants will be released to your county government for this financial year 2019/20 until and unless amicable settlement of this matter is arrived at,” the Treasury said in the circular.
Nairobi tops the list of pending payments at Sh9.82 billion, followed by Mombasa at Sh2.28 billion for bills dating back to 2013.
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