City Hall kicks off plan to settle Sh2.7bn bills

Nairobi County government has kicked off plans to settle its pending bills following President Uhuru Kenyatta’s directive that the debts be cleared by June 30.

Nairobi County Finance Executive Charles Kerich said that they will pay at least Sh2.7 billion for works, small suppliers and part of legal fees.

The figure, he said, is part of the Sh5.32 billion that an audit committee formed to verify disputed bills certified as genuine claims.

“We cannot just pick money from our accounts and pay so we are working on a supplementary budget to cover at least Sh2.7 billion pending bills and some part of the legal fees. We may not pay all of it but we are targeting works and services,” said Mr Kerich on Wednesday.

He said a supplementary budget would be handed to the County Assembly on Friday.

“By Friday we will be done with the supplementary budget and hand it over to the County Assembly as we have been working on it for a while,” he said.

The payment plan, Mr Kerich said, means that the county government will have to stop some projects that had not been committed and others that can be rolled over to be able to pay the debt.

He said the audit committee had cut the payable bills from Sh22.7 billion disputed debts.

Under works, the committee arrived at Sh1.5 billion from the original Sh5.4 billion figure; Sh1.2 billion from the Sh2.2 billion for services by suppliers and Sh2.61 billion in legal fees from the initial Sh15.1 billion claim.

“The report captured only the bills that were in dispute including works, services and legal fees. The other ones were not handled by this committee, it is only these three areas that we focused on. Our other debts still stand like that to Kenya Power #ticker:KPLC, KRA and so on,” said Mr Kerich.

In the county’s second supplementary budget in April, Sh162 million was set side to take care of pending legal obligations.

According to official documents, Medium Term Debt Management Strategy paper for the 2019/2020 financial year, City Hall has a debt of more than Sh70 billion consisting of statutory debt, money owed to suppliers of goods and services, legal creditors, personnel emoluments, loans and contingent liabilities.

Some Sh30.13 billion is owed to workers in unpaid statutory deductions, Sh10.6 billion to unpaid suppliers, contractors and lawyers, Sh3 billion owed to various banks, Kenya Power Sh0.64 billion in utilities while Sh134 million is unpaid for retired and deceased staff.