Nairobi — A report by the Parliamentary watchdog Committee has cited contractor non-performance, delayed exchequer releases, budget cuts, and inadequate project management as factors plaguing infrastructure projects in the country.
These factors, the report by the Public Accounts Committee (PAC), says has led to the stagnation of projects and accumulation of significant pending bills amounting to billions of shillings owed to various contractors and suppliers by the National Government.
According to the report by the Public Accounts Committee (PAC), during the Financial Year 2020/2021, Ministries, Departments, and Agencies (MDAs) faced budgetary under-performance primarily due to delayed exchequer releases, supplementary budget cuts, or the inability to collect Appropriation-in-Aid.
"This invariably led to under-performance of programme objectives and lack of service provision to the public," said Nominated MP John Mbadi, who chairs the committee as he moved the report for debate in the House.
"On budget cuts, this House stands indicted because we allow too many supplementary budgets, which distort and disrupt the budget implementation process hence resulting in audit queries," he added.
Notably, as of December 31, 2023, the State Department for Roads had pending bills totaling Sh162 billion, despite certified works amounting to Sh650 billion.
Mbadi expressed concern with the ballooning pending bill owed to contractors and suppliers by the State department roads. Roughly, it will take up to a minimum of four to five years to settled the debt as the annual allocation for the state department is roughly Sh40 billion to Sh50 billion.
He urged the political class to stop politicking and acknowledge the country's ballooning pending bill and take radical steps to address the situation.
Mbadi urged a halt to new road construction projects, emphasizing the need to complete ongoing projects to maximize the value of the funds invested.
"We should stop any new constructions of roads and continue to complete ongoing roads so that there would be value for the money spent and pumped into those roads. It is about time this House bit the bullet, I have said it before and I say it again: Let us take radical steps," he held.
Despite ongoing efforts to compile a list of stalled projects, Mbadi disclosed that his committee would provide information on the interest charged on delayed payments and incomplete projects in the final report.
The committee recommended that the National Treasury only approve projects with guaranteed funding and completion within the medium-term economic framework.
Mbadi emphasized that no new projects should commence until existing ones are completed or fully funded.
"Accounting officers are further warned of personal responsibility should contractors fail to perform, considering evaluation of technical and financial capacity of bidders is mandated under the procurement law," he said.
"Failure to enforce and/or recall performance guarantees will also be personally remedied by accounting officers," Mbadi held.
The committee also urged the National Treasury and the National Assembly to make realistic revenue projections and achievable expenditure estimates, starting with the 2024/2025 Budget Estimates.
Mbadi emphasized the need to avoid over-budgeting, emphasizing that revenue projections should align with actual possibilities.
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"The reality is that we are over-budgeting as a country. We are budgeting for money that is on paper and that cannot be realized. We need to be realistic about our projections. Our Parliamentary Budget Office has always warned us every financial year that the revenue projections from the National Treasury are unrealistic. However, we continue and go ahead to approve them."
The Committee has also recommended that the National Treasury should only rationalize budgets that have not been committed.
He suggested uniform borrowing by the National Treasury throughout the year to prevent end-of-year rushes in disbursements and procurements.
He also asked the Government National to stop borrows a lot of money at the end of the financial year to avoid MDAs crossing over the year with pending bills.
