Kenya: MPs Fault Telkom for Collecting Fibre Revenue Without Treasury's Approval

24 February 2021

Telkom Kenya CEO Mugo Kibati is on the spot for billing and collecting revenues, on behalf of the ICT ministry, from the users of National Fibre Optic Backbone Infrastructure (Nofbi) without the approval of the National Treasury as required by law.

While appearing before the Public Accounts Committee (PAC) of the National Assembly Wednesday, Mr Kibati was at pains to explain why his organisation has continued to collect the revenues despite the contract for the same having expired in 2016.

This comes even as it emerged that the Information Communication Technology Authority (ICTA) was working without the knowledge of the ICT Principal Secretary Jerome Ochieng' to have Telkom's contract renewed.

Not remitted anything

Despite collecting over Sh2 billion since it was contracted in 2013 by the ICT ministry, Telkom Kenya has not remitted anything to the government contrary to the contractual terms.

Instead, Mr Kibati told the watchdog committee chaired by Ugunja MP Opiyo Wandayi that what his organisation has collected so far has gone to operations and maintenance.

MPs Aden Duale (Garissa Township), Jessica Mbalu (Kibwezi East) and Mr Wandayi were surprised at how Telkom Kenya has been doing the collections without a proper audit.

"Where did the CEO Telkom Kenya draw the powers to collect revenue on behalf of the government? What is clear is that they collected without the concurrence of the National Treasury," Mr Duale said.

"You are doing this thing (billing and collection of revenue) behind the back of the PS," added Mr Duale.

Article 209 (1), (2) and (4) of the Constitution and Section 75 (1) of the Public Finance Management (PFM) Act confers the Cabinet secretary in charge of the National Treasury the powers to designate in writing the receivers of the national government revenue.

Account for the revenue

The Act requires any person so designated, to receive and account for the revenue. The receiver is also mandated to provide monthly statements to the National Treasury and the Commission on Revenue Allocation (CRA).

But from what is being revealed, it seems the government has been funding the operations of commercial entities without recovering the cost which amounts to lack of prudence in the use of public resources.

"We are dealing with a very intriguing situation here. So, how does the government work? There is no law, no framework to collect the money?" Mr Wandayi wondered as he warned that his committee will bring to book "every single soul, whether mighty or small, who was involved in this malpractice".

Telkom's contract

Mr Wandayi's fears of a government working at cross purpose with the right hand not knowing what the left hand was doing, were further laid bare after the ICT PS , Mr Ochieng', denied knowledge of any attempt by ICTA to extend Telkom Kenya's contract.

"I don't have any correspondence in terms of the ICTA letter to Telkom Kenya. The said letter was not copied to me," Mr Ochieng' told the committee.

When asked by Mr Duale whether the ICTA CEO had breached the protocol by writing to Telkom Kenya on the extension of the Telkom Kenya contract without the knowledge of the ministry, Mr Ochieng's response was in affirmative.

"Yes. It is a breach," Mr Ochieng told the committee, adding; "the intention, I wouldn't know."

Sabotage

This came even as Mr Wandayi called out ICTA for sabotaging its parent ministry.

"Through conduct, ICTA is not carrying itself like an agency of the ministry," said the Ugunja MP.

Telkom is required to account for these billings and collections to the ICT ministry through quarterly reports on the usage and uptake of services as per the contract but the PS told the committee that his ministry had received none.

This is despite Mr Kibati saying that Telkom Kenya is currently providing these updates in weekly management meetings held between ICTA and Telkom Kenya. But the ICT ministry remains in the dark.

Mr Ochieng' told the committee that he got interested "in this particular contract when this matter came up in the Auditor-General reports".

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