Mathias Ringa
4 November 2009
Nairobi — The cash-strapped Mombasa Municipal Council has a reason to smile after winning a major concession from the major hotels over a controversial bed levy.
The two have been in court for the last three years, with each party digging in -- the hoteliers had refused to pay the Sh6 per room per day and the Council on the other hand insisted they should.
The hoteliers main reason for boycotting payment of the levy was the council's refusal to render them services such as garbage collection.
Town Clerk Tubmun Otieno said the council last month signed an agreement with the Kenya Association of Hotelkeepers and Caterers (KAHC) Coast branch after they agreed on the new levy.
This will net the council an average Sh600,000 per month, worked out on a conservative 200 rooms per hotel sample.
Mr Otieno said as per the agreement hotels would be paying Sh6 per occupied room per day.
He noted that the hotels' association also agreed to withdraw its case against the council at the Mombasa law courts as regards to the levy.
One of the conditions, however, was that the council would be collecting garbage from hotel premises on a daily basis.
"After a three year battle at long last we have arrived at an agreement with hotels that they pay Sh6 per occupied room per day. In return we shall be providing them with services," Mr Otieno said.
"Whatever we collect from the hotels will boost our coffers since our annual budget has a deficit of Sh600 million. Our budget stands at Sh2 billion whereas we collect Sh1.4 billion of revenue per year," he added.
Following the agreement, the council has earmarked two trucks for collecting garbage on hotels.
KAHC Coast branch chairman Titus Kangangi confirmed that the hotels had caved in to the council's demands after extracting that condition.
Mr Kangangi said following the compromise, the association withdrew its court matter against the civic body.
The KAHC official added that 35 hotels within the municipality would be paying Sh6 per room per day on 50 per cent bed occupancy.
He said the association and the council agreed that the hotels pay the levy for a period of nine months every year.
For this year, he said, the council had allowed them to pay for seven months only.
Since 2007 the hotels had refused to pay the levy citing non-provision of services by the council.
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