•Repaid loans to benefit individuals and private companies.
•Treasury said it would give a comprehensive brief after concluding negotiations with Adani.
Image: EZEKIEL AMING'A
Members of Parliament want ongoing negotiations with Adani Holdings on the JKIA takeover stopped until details of the deal are made clear.
The lawmakers also questioned the decision by the National Treasury to take over Kenya Airways' Sh83.1 billion debts, passing the burden to taxpayers.
Members of the Public Debt and Privatisation Committee made the call on Wednesday after Treasury PS Chris Kiptoo failed to provide adequate information on the deal.
Kiptoo, who appeared before the committee to answer questions by Parliament on the plan to hand over JKIA to the Indian investor for 30 years, only had a one-line response to the question.
“The review of the proposal by Adani for JKIA upgrade is ongoing. The National Treasury will give a comprehensive submission after concluding the review,” Kiptoo said.
The explanation did not go well with members of the committee who demanded that Treasury be directed to stop further engagements with Adani.
The lawmakers said the matter was of immense national interest to warrant such a brief explanation.
“I am amazed by the short answer to such a serious question. We are not seated here to get such short answers,” said Kitui MP Irene Kasalu.
“JKIA is a government property, a security area and means a lot to Kenyans and we cannot take what you have presented as an answer."
Kinangop MP Kwenya Thuku said government’s laxity in providing information was the reason for speculation and suspicion around the deal.
“I have enough texts here from Gen Z and the public. Some of the protests we witnessed last month were as a result of the secrecy in these deals,” he said.
The Balambala MP Abdi Shurie-led team said Parliament will have to take steps to stop any further dealings on the takeover until it is properly explained.
Adani Holdings, an Indian conglomerate, is pitching to refurbish JKIA and run it for 30 years before handing it back to the government. MPs stopped a similar plan in 2019 when KQ applied to run the airport.
On KQ loans, Treasury assumed the role of primary debtor for debt owed by the national carrier at the beginning of the current financial year.
This saw the ministry pass to taxpayers, the burden of repaying KQ loans to the tune of Sh83.1 billion.
The loan was made part of the mainstream public debt; hence the principal and interest were included in country’s external debt.
About Sh21 billion is projected to be paid out in the current budget and Sh21.3 billion and Sh10.7 billion in subsequent year budgets.
Taxpayers thus have to bear the burden of repayment of the loan – largely from US lenders Citibank and JP Morgan.
Shurie’s team asked National Treasury, two months ago, to provide full details of how the government took over the repayment.
MPs want answers on why taxpayers are settling debts which will end up benefiting private companies and individuals.
Lawmakers are concerned that taxpayers will only benefit from 48 per cent of the repaid loans and the rest to individuals.
The government owns 48 per cent of KQ. The carrier's lenders own 38 per cent while KLM has a 7.76 per cent stake.
KQ employees have a 2.44 per cent stake, 0.5 per cent for Standard Chartered Bank and the rest for individuals.
MPs dismissed Kiptoo’s explanation that the government is a majority shareholder.
“It is a government-linked institution as defined by the PFM Act,” the PS said.
The lawmakers said Kenya having majority shareholding, does not merely mean the company is owned by the government.
Wajir East MP Aden Daudi said, “We are guaranteeing loans benefiting private players…our benefit is only 48 per cent.”
“It is true the government owns 48 per cent but it is not a majority shareholder. We need to be clear on what this government-linked institution sits in our laws.”
Thuku said taxpayers are in a fix as debt payments are priority spending areas by the government.
“The issue we are asking is very pertinent. We are under scrutiny because of this public debt. Any debt taken over by the government becomes a first charge on the Consolidated Fund Services expenditure. We must not take it casually,” Kwenya said.
Kitui Central MP Makali Mulu said, “The loan will be paid by all Kenyans yet we have less than 50 per cent as government. Why do you want to drag all Kenyans to pay yet more than 50 per cent will go to individuals and private companies?”
It emerged at the meeting that the shareholding agreement had not been signed hence completely exonerating KQ from any claims of repayment of the debt.
“Do you think you are doing justice to Kenyans? Do you want us to go to the people and tell them that they are paying a loan that is benefiting other private players?” Makali asked.
The law says the government shall not guarantee loans in an entity where it doesn’t have controlling shares.
But Kiptoo defended the deal saying there is a shareholding agreement the government entered into with KQ last October hence the guaranteed amounts will be repaid.