The government has revealed plans to dissolve 140 poor performing State-owned companies in a push to cut down on public expenditure.
Speaking on Wednesday during the Kenya Pipeline Company (KPC) dividend cheque handover, at the KPC headquarters Treasury Cabinet Secretary, Njuguna Ndung'u stated that the parastatals that the government is looking to wind up were unprofitable and a burden to the taxpayer.
He explained that the government had invested more than Ksh5.7 Trillion in the development of the State-owned companies, a figure which was not reciprocated in the returns.
According to the Treasury, only 0.13 per cent of the funds were reflected in the returns.
Besides gobbling up public funds, the CS explained that the parastatals were a huge liability over the sheer amount of pending bills they have accrued over the years.
The CS explained that the pending bills amounted to 81.3% resulting to huge losses for the government.
While justifying the dissolution, CS Njuguna noted “You have to understand that so much has been lost, on top of low returns we also have pending bills that need to be looked at so we have to find a way to minimise that.”
Speaking at the event, the Energy CS, Davis Chirchir stated that all government agencies' assets had to work for Kenyans.
“We are seeking to ensure that the assets are working for Kenyans and we therefore thank the KPC Board for the gesture to give us the dividends,” explained Chirchir.
The Kenya Pipeline Company issued a Ksh5 billion dividend cheque to the Treasury on Tuesday in response to the President’s directive for State Agencies to remit 80 per cent of their profit to the Treasury.
Notably, the directive has also caused jitters in public service as civil servants fear looming job cuts.
The parastatals will join a list of other government owned corporations experiencing changes with plans and processes underway to privatise other non-performing corporations.
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