Human rights groups sue State over planned sale of parastatals

By Fred Kagonye | Apr 12, 2024
Parliament passed the Privatization Act of 2023, which was assented to by President William Ruto on October 9, 2023, that repealed the Privatization Act of 2005. [PCS]

A fresh bid to stop the government’s plan to sell some hotels and parastatals has been lodged before the High Court.

The Kenya Kwanza administration is being accused of skirting the law that requires the government to involve the National Assembly and the Treasury Cabinet Secretary for approvals and oversight.

The case has been filed by at least 200 human rights groups under the Civil Society Reference Group (CRSG).

According to their lawyer Kevin Oriri, the current arrangement is illegal and void as the Executive has created a vague process to sell government assets.

He argues that there will be no one to account for or be queried if Kenya Kwanza goes ahead with the plot to sell State agencies. The lobby groups have sued the Privatization Authority, which is charged with overseeing the sale, and the Cabinet.

They are challenging a move by the authority to invite interested buyers to bid for KWAL Holdings (KHEAL), Kenya Wine Agencies Limited, and the Development Bank of Kenya.

Others are Kenya Hotel Properties Limited and the Kenya Development Corporation (KDC), which is the Kenya Safari Lodges and Hotels Limited which incorporates Mombasa Beach Hotel, Ngulia Safari Lodge and Voi Safari Lodge.

Also in the list are Golf Hotel Limited, Sunset Hotel Limited, Mt Elgon Lodge Limited, and Kabarnet Hotel Limited.

The entities are among 28 that had been identified for privatisation under the Privatization Act of 2005, and publicised through Gazette Notice 8739 of August 14, 2009.

In the case, Mr Oriri, says Parliament passed the Privatization Act of 2023, which was assented to by President  William Ruto on October 9, 2023, that repealed the Privatization Act of 2005.

“Under Section 68 of the Privatisation Act, 2023, Gazette Notice 8739 of August 14, 2009 is identified as having lapsed. There is now valid privatisation programme that exists, yet, under the new law, and upon which a basis can be made for the impugned privatisation processes,” says Oriri.

He argues that any process that purports to emanate from the 2009 gazette notice and proceeds as per the requirements of the repealed law is null and void.

The lawyer says the move by the authority is a conspiracy with the Cabinet to commence the privatisation without involving Treasury Cabinet Secretary Njuguna Ndung’u, stakeholders of the said entities, the public, and the National Assembly.

According to the lawyer, after the signing of the Privatization Act of 2023 into law, a new privatisation programme ought to have been established for there to be a legal basis for privatisation.

When the law came into place, CS Ndung’u proposed a privatisation programme and invited stakeholders and the public to comment. Cabinet okayed the sale of the entities in a meeting on February 14, 2023.

The government is fighting another court battle against journalist Gitahi Ngunyi and ODM leader Raila Odinga over the planned sale of the State agencies.

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