Kenya: MPs on Spot for Approving New Multibillion-Shilling Projects

26 January 2021

The National Assembly is on the spot for approving new multibillion-shilling projects despite older ones stalling after running into financial headwinds.

The nod by members is against a warning by the Parliamentary Budget Office (PBO) that stalled initiatives continue to tie up public resources while adding little or no value to economic development of the country.

In its budget watch for 2019/20 and the medium-term report, PBO says 40 new projects to be financed entirely by the exchequer were approved and allocated Sh1.2 billion by the National Assembly for the period under review.

This is notwithstanding that 545 of them across the country valued at Sh366 billion have stalled according to the National Treasury circular of 2018.

By the time of stalling, the projects that include water dams for irrigation, roads, learning institutions and construction of courts among others, had already consumed Sh72.5 billion.

"The legislators have a duty to help curb accumulation of stalled projects by review of draft estimates and regular oversight or monitoring of annual budget implementation," says PBO in a document submitted to the National Assembly.

PBO advises parliament and its committees on fiscal matters.

"MPs, through departmental committees have the responsibility to keep an eye on potential projects with high risk of stalling and addressing the problem through budgetary interventions or sanctions," the budget office notes.

The energy and infrastructure sector where the roads subsector is housed was allocated Sh470 million and accounts for the biggest portion of the new projects.

Policy directive

Education was allocated Sh200 million, environment, water and natural resources Sh100 million, health Sh100 million, governance, justice law and order Sh120 million among others.

On July 20, 2018, President Uhuru Kenyatta issued a policy directive to all government accounting officers freezing all new government projects until ongoing ones are completed.

Accounting officers in government include state house comptroller, clerks of Senate and the National Assembly, Chief Registrar of Judiciary (CRJ), Principal Secretaries from all government ministries, vice-chancellors of public universities and CEOs of State corporations, commissions and independent offices.

President Kenyatta warned them that they would be held personally responsible if they sanctioned new projects without express authority from the National Treasury.

The directive was meant to stop wastage of public resources and the habit of government agencies abandoning incomplete projects for new ones.

However, details of the PBO document are a clear manifestation that the president's directive may have not been heeded as new multibillion shilling projects continue to be launched even as old ones choke in dust.

Other than just allocating monies, MPs have the mandate of ensuring that feasibility studies for new projects are undertaken to determine their viability and the capacity of the agencies to implement them.

Stalled projects

"Projects without feasibility studies could be suspended for implementation in the succeeding financial year. The legislature may consider implementing projects identified during the national budget public hearings to allow feasibility study as well as establishment of an implementation strategy," the PBO document says.

The MPs also have the responsibility of keeping an eye on the multiyear cost implications of some of the new projects to allow scheduling of resource allocation in the subsequent financial year.

This deters the possibility of having pending bills or stalled projects.

A review of stalled projects indicates that feasibility studies, appraisal documents and implementation support- quarterly monitoring and mitigating challenges during budget execution- are either not available or not well aligned.

Delays in project completion are also aggravated by budgetary cuts, reallocations to other areas of spending, low budget ceiling, lack of funds, expiry of loan agreements before disbursements, ongoing investigations by the relevant government agencies and litigations.

Others include delays in obtaining development approvals from the national and county governments, termination of contracts, re-scoping of works among others.

"Effective management of cash flow and procurement plans are necessary towards proper budget execution," says PBO.

According to PBO, this is critical in informing procurement timelines and delivery of project milestones, a key component to reducing cases of projects stalling or contractors abandoning projects on account of cash flow difficulties.

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