Treasury rejects MPs' bid to approve projects worth Sh1bn
Treasury Cabinet Secretary Henry Rotich speaks during the Economic Survey 2019 launch at KICC on April 25, 2019. The Treasury said that the government has prepared a comprehensive transport policy which is before Cabinet. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
- It also rejected a proposal to cap financing of the 2019/20 budget at Sh2 trillion, which would have ensured that the deficit is not more than 5.1 per cent.
- Parliament had argued that the national government was initiating large projects and getting into contractual agreements before it got to learn of them.
The Treasury has rejected a proposal by Parliament to pre-approve all projects worth Sh1 billion, putting it on a collision path with legislators.
According to its submissions to Parliament, the demand by MPs to be given a chance to approve projects valued at Sh1 billion and above will go against the principal of separation of power.
“The Treasury sought the legal opinion of the Attorney General and it has been observed that there is no legal basis for pre-approval by Parliament of projects, as this contravenes the Constitution on principles of separation of power, the Public Procurement and Disposal Act, 2015 with regard to procurement of works, contracts, public goods and services and also, PFMA, 2012 on the roles and responsibilities of accounting officers,” the Treasury writes.
It also rejected a proposal to cap financing of the 2019/20 budget at Sh2 trillion, which would have ensured that the deficit is not more than 5.1 per cent.
BUDGET
The Treasury instead presented a Sh2.7 trillion budget, out of which Sh2.1 trillion will be financed by the government and the remaining Sh607 billion borrowed.
“As a government, we are committed to remain within this fiscal consolidation plan. However, there may be unforeseen and unavoidable events such as drought mitigation or security interventions that may necessitate slight deviations from the plan,” the Treasury explains.
Parliament had argued that the national government was initiating large projects and getting into contractual agreements before it got to learn of them.
It had therefore resolved that the Treasury starts pre-approving projects from July 2018 to avoid a situation where it was caught off guard or learn about them when it was too late to act.
STALLED PROJECTS
The Treasury said it has however submitted a list of approved projects above Sh1 billion for Parliament to know what is going on.
The government has been accused of starting too many projects and lacking resources to complete them, ending up with too many ghost projects scattered across the country.
Legislators have also been pushing the government not to start any new projects until old ones are completed.
To this end, MPs ordered the ministry to conduct an audit to establish the total number of stalled projects and compel various institutions to come up with a policy prioritising completion of the ventures.
“The Treasury has critically reviewed this requirement and agreed that there is need to carry out an audit of stalled projects,” the Treasury notes.
EXPENDITURE
Parliament also asked the Henry Rotich-led docket to ensure that any changes in projects in the next financial year do not affect those concerning the manufacturing sector unless sufficient reasons are provided along with a plan on how any changes will be mitigated.
“Rationalisation of budgetary provision for projects is based on absorption of funds, revenue performance, legal, land compensation and other challenges in budget implementation,” the Treasury explains in its brief to Parliament.
Another proposal presented by Parliament to the Treasury was to expand the current leasing framework of motor vehicles and scrap buying to reduce expenditure.
The Treasury said that the government has prepared a comprehensive transport policy which is before the Cabinet.
FERTILISER
When approved, it will be implemented by all MDAs (ministries, departments and agencies) to promote efficiency in the management of transport in the public sector.
It will be a game changer should the government adopt a policy of leasing for all departments beyond the police as it is currently doing.
The Treasury said it had communicated to Parliament with regards to ring-fencing Sh1 billion from the budget for fertiliser subsidy to cater for coffee farmers.
“This is being considered in the context of revival of the coffee sector initiatives,” the Treasury said.
Parliament also wanted the last mile connectivity programme to be intensified to ensure all public institutions and individual households are connected to power.
