State to pay contractors Sh537 billion pending bills, says PS

The Principal Secretary for Land, Public Works, Housing and Urban Development, State Department for Public Works Joel Arumonyang addressing contractors at a workshop at Kakamega Golf Hotel on October 24, 2023. [Benjamin Sakwa, Standard]

The government has committed to paying contractors their dues, amounting to a total of Sh537 billion, before the end of the current financial year.

Public Works PS Joel Arumonyang' said the payment will be made after an audit of the pending bills.

He said a special committee has been established to audit pending bills, terming the move a step in the right direction to solve the perennial problem of pending bills.

Mr Arumonyang' was responding to questions by contractors at a Kakamega hotel who demanded to know what the government was doing to pay them.

The contractors claimed that both the national and county governments had led to the collapse of many businesses due to delayed payment.

The PS attended a public participation forum on the draft National Construction Authority (NCA) amended regulations 2023 bringing together contractors from Kakamega, Bungoma, Busia and Vihiga counties.

"A committee established by the cabinet will examine pending bills in national and county governments and have them cleared," said Mr Arumonyang'.

He added: "Pending bills reduce money circulation in the economy and affect livelihoods. County governments have enormous pending bills which must be cleared to resuscitate the economy."

Both the national and county governments have over Sh537.2 billion in pending bills dating back to 2005-2022, a situation that has left contractors and suppliers of goods and services in a state of uncertainty.

"Pending bills have tied a lot of working capital for the business people. The government is deliberate on solving the issue once and for all," said the PS.

He assured the contractors that they would still be considered to undertake mega projects initiated by the government.

"I have heard your cry, that only foreigners are considered for mega projects. I want to assure you that it is government policy to reserve at least 30 per cent for local contractors," said the PS, adding that foreigners are also obliged to subcontract local contractors in some of these projects.

Arumonyang' regretted that counties have not been supporting residents as they award contracts to firms based in Nairobi. "This way, they are exporting money to the city instead of having it circulate locally to stimulate economic growth.

The PS told contractors that the government will ensure they access available opportunities under the housing agenda being pushed by President William Ruto.

"You will also get contracts in the county aggregation industrial parks apart from the affordable housing project. All you need is to get organised and ensure quality work is produced," said Mr Arumonyang'.

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