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Kenya Pipeline, Railways top holders of NCA Sh1.9bn debt

 Maurice Aketch
National Construction Authority CEO Maurice Aketch. FILE PHOTO | NMG 

Key parastatals are yet to pay millions of shillings owed to the National Construction Authority (NCA) amid budgetary cuts from the Treasury.

NCA chief executive Maurice Aketch said the Kenya Railways Corporation (KRC), Kenya Rural Roads Authority (Kura) and Kenya Pipeline Company (KPC) that owe the agency Sh963.8 million are yet to start paying the debt ,which has been oustanding for more than three years. The debt accrued from unpaid construction levies that were later scrapped.

Auditor General Edward Ouko said in his report for the 2016-17 year that KRC owes NCA Sh625.13 million. Others owing NCA are Kura (Sh71.16million) and KPC (Sh267.54 million).

“These (budgetary cuts) could be caused by outside factors but none of them has told us that—we are still engaging and we are pursuing all avenues,” Mr Aketch said.

Debt payment by state corporations suffered in April after Treasury rejected most of their budgets for the 2019-20 financial year citing an overshoot in spending and ambiguous expenditure plans.

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But NCA said writing off the debts remains the last option. This, however, must get approval from the line ministry and the Treasury.

The debt represents a 54 per cent of the Sh1.9 billion owed to the construction authority before abolition of the construction levies in January 2017.

NCA can only approve write-offs for amounts not exceeding Sh100,000 meaning it needs clearance from Treasury if the three parastatals are unable to pay off the debts.

The debts have stifled NCA’s operations. The abolished construction levies were some of the key sources of funding for the construction industry watchdog.

The scrapping of the levies announced in January 2016 was meant to spur investments in the construction industry but have since pushed NCA to fully rely on the Treasury to fund its surveillance operations.

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