24 February 2014

Kenya: Anglo Leasing Companies to Get 125 Billion

The government has decided to honour and pay up to Sh125 billion owed to the controversial 18-contract Anglo Leasing deals.

Even though former Finance Minister David Mwiraria once said the Anglo Leasing was a scandal that never was, and that all the money had been wired back, it has emerged that the government is now ready to pay to "forestall endless legal battles".

As a sign of things to come, the government through the treasury is proposing to pay up the money through installments and seeking the support of the legislature.

The first batch of these installment is Sh2 billion which Treasury has proposed to pay up immediately through the Supplementary Budget currently being considered by the National Assembly.

It was not clear who will be the beneficiary of this payment and for what project, but an MP revealed to the Star it was directed to an entity that supplied Police communication and surveillance system.

The earlier effort at modernising the police communications system was handed to a British company Simoco as part of the Sh60 billion Anglo Leasing scam.

The details of the government's commitment to service the debts were submitted secretly to the Budget Committee last week by the National Treasury Cabinet Secretary Henry Rotich.

According to the MP the decision to pay was arrived at the government lost appeals in two cases filed in England and Switzerland worth of the supply of communication gadgets in the security sector.

The committee chaired by Mbeere South MP Mutava Musyimi is scrutinising the supplementary budget from the various ministries and departments before they are tabled in the House for approval this week.

The 18 "Anglo Leasing type" projects were mostly inherited by the Narc administration or initiated after Mwai Kibaki had been elected president after the 2002 General Election.

The scheme was inherited by the Kibaki government and morphed into the now infamous 18-contract Anglo Leasing deals in which the country could still lose billions in dispute arbitrations arising from the State-guaranteed projects.

Conceptualised between 1998 and 2004, the projects included the delivery of a naval ship, the Postal Corporation of Kenya satellite service procurement, the failed second-generation passport scheme and a communication system for the Police Service.

Rotich is reported to have told the committee that attorney general Githu Muigai had advised the government to pay the debts "because all the legal avenues had been lost in the two cases".

A member of the committee who confided in the Star said that some members were of the view that Rotich must produce a written opinion from the AG explaining the government has exhausted all possible options in the matter touching anglo leasing.

The committee is said to have asked Rotich to get an official undertaking from the government through the cabinet that the monies should be paid.

"Anglo leasing is no longer a secret matter because the days when the government used to appropriate money in fictitious vote heads are long gone. Parliament allocates money and government ministries and departments must be accountable to every shilling," the MP said.

"If the government pays up the debts, the better but Parliament can only be of assistance if the committee is facilitated by the required information," he said.

Although the committee has always been open to the press in its deliberations, this time the media was locked out. It also abandoned its traditional meeting venue at the Parliament small dining room, choosing the Senate debating chamber at County hall that is under tight police security.

Kiminini MP Chris Wamalwa, a committee member, has vowed to oppose the appropriation if it is adopted by the committee.

"We have never been told who the beneficiaries of Anglo leasing are. For how long will Kenyans continue paying for these types debts? As a House we will scrutinize every allocation and we will not allow plunder of public resources to happen," said Wamalwa who was out of the country at the time.

The Kiminini MP also accused the committee leadership of concealing the committee of locking the media out of its deliberations."The standing orders are clear that the budget making process must be open to the public. It is wrong for the committee leadership to have denied the press access," he said.

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