Nairobi County Government is staring at total service paralysis after debt owed to third parties has hit an all-time high spelling doom for contractors and suppliers.
National Treasury has withheld City Hall’s funds prompting eligible pending bills owed to contractors and suppliers.
In the previous financial year ended June 30, 2020, Nairobi County Assembly approved Sh3.6 billion supplementary budget to settle the supplier and contractors’ dues but this was not effected.
This, despite a directive from the National Treasury, for those with pending bills of Sh5 million and below to be given priority.
The lack of payment of garbage contractors has seen the capital city choking with garbage with heaps of trash being witnessed in markets, streets, backstreets, roadsides, and even in the city estates.
This as the garbage collection forms downed their tools or reduced their fleet over non-payment of the dues.
Notably, more than 80 per cent of the solid waste generated in the city is collected by private firms contracted by the county government. The contractors have their specific areas of operations.
The Ann Kananu-led City Hall has also been embroiled in bank loans, arrears owed to statutory bodies, merchants and litigation, contingent liabilities and loan guaranteed by the government.
City Hall has been faulted for not repaying KCB Group loan, with the outstanding balance rising to Sh4.4 billion days after the lender got a nod to auction Nairobi County over the debt.
The administration failed to provide an explanation on why repayment for the loan was halted.
In her report for Nairobi County Executive for the financial year ended June 30, 2020, Gathungu said City Hall has not been repaying the loan, with the outstanding balance rising to Sh4.4 billion.
“Management has not explained why repayments for the loan were halted. My opinion is not modified in respect of this matter,” said Gathungu.
According to the Auditor-General, records at her disposal showed that the loan was acquired in October 2011 by the defunct Nairobi City Council with the original loan amounting to Sh5 billion secured from Equity Bank Kenya Ltd.
The loan has brought about the disruption of the Integrated Financial Management Information System (IFMIS) prompting ineffective in the planning of budgeting to procurement, payment, accounting and reporting.
This also locks out the Auditor-General from annual review and audit of accounts and the Controller of Budget (CoB) to see how Kenyans tax resources are spent by the county.
