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Audit queries Sh148m sunk in State firms’ privatisation

NEWS
By Frankline Sunday | September 2nd 2021

Auditor General Nancy Gathungu. [Denish Ochieng, Standard]

The Privatisation Commission is in the spotlight for spending tens of millions of taxpayers’ money in stalled efforts to privatise State-owned enterprises.

A report by Auditor General Nancy Gathungu says the commission spent Sh148 million out of Sh163 million operational costs for the year ended June 2020 on privatisation efforts that appear to have stalled.

The funds were spent in paying consultancy services for the privatisation of the Kenya Meat Commission (KMC), Kenya Wine Agencies Limited (Kwal), Tourism Finance Corporation, Agro-Chemical and Food Company and five sugar millers.

“However, the privatisation programme for some of the above entities has been underway for over seven years, casting doubt on the likelihood of realising value for money from the expenditure of Sh148.6 million incurred,” said Ms Gathungu in the latest report on the commission.

The expenditure marked a significant increase from the Sh27.6 million the commission spent on transaction advisory services in the year ended June 2019.

According to the report, the commission spent Sh294 million in the year ended June 2020, absorbing just 34 per cent of the Sh896 million approved budget.

The commission blamed the low absorption of funds and slow privatisation programmes on the inadequate composition of its members in the period under review.

“Following the signing of the contract for transactions advisory services on March 14, 2019, the consultant submitted draft diligence reports for Kwal and KMC by February 2020 for review,” said Privatisation Commission Chief Executive Joseph Koskey in a statement.

“The reports now await consideration by the commission once fully constituted to pave way for the  next steps.”

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