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Daily Nation : February 2nd 2014
30 | Sunday Review Governors set to review their taxes BY FRANCIS MUREITHI @FMureith1 email@example.com Governors are aligning their tax regimes to conform to those of the national government to ensure that businesses in the counties do not close shop, Council of Governors Chairman Isaac Rutto has said. With proper taxation, Mr Rutto said yesterday, the counties would create more jobs and spur development. “Our aim is to make sure that the devolution train does not derail as we want to ensures that businesses in the counties flourish,” he said. He said Bomet County had suspended implementation of its Finance Act because it was passed without involving the public, sparking uproar from traders and other stakeholders. “The law may not eliminate poverty as it proposes higher fees for small-scale and informal traders,” he said. “(It) is a sure way of driving them out of business as the rates applied are prohibitively high.” And in a bid to appease the trad- ers, Mr Rutto said his government would revert to the old levies. Raise revenue “We must raise revenue to sus- tain the county; in the meantime, I will make sure the revenue collectors seal all loopholes so that we can hit our targets as we await for the County Assembly to review the Act.” Hundreds of traders in vari- ous counties, including Nakuru, Kiambu, Mombasa, Nyeri and Bomet have staged protests to demand a review of the taxes which they claim were increased without public participation. Nakuru County has also recalled its revised Finance Bill 2013/2014 after traders complained that it was a sure way driving them out of business. At a stakeholders meeting held at the Nakuru Agriculture Training Centre, Governor Kinuthia Mbugua and his deputy Joseph Ruto agreed that the public was not been involved before the Bill was drafted. According to some county lead- ers, the increased levies are meant to spur their counties’ economic growth. But Treasury Principal Sec- retary Kamau Thugge told the Senate Finance Committee that the taxes charged by county governments were illegal. SUNDAY NATION February 2, 2014 INVESTMENT | Former premier asks President to tone down on adversarial public approach Raila’s counsel to Uhuru: Restore public confidence in rail project Odinga has warned cancelling the project will cost taxpayers billions of shillings in settlements BY EMEKA-MAYAKA GEKARA @emeka_mayaka firstname.lastname@example.org O DM leader Raila Odinga has blamed Chinese commercial interests for the raging con- troversy over the construction of a modern railway from Mombasa to Nairobi, and asked President Uhuru Kenyatta to address the questions raised about the project. The former prime minister told Sunday Nation that the claims and counter-claims about the integrity of the railway tender have put the project in jeopardy, but cautioned that cancelling it will cost Kenyans billions of shillings. “The costs of cancelling the contract are dire. The contractor will move to court and seek damages, arguing that he had already mobilised resources. We will pay them money and miss the railway,” said Mr Odinga. He is now urging the President to appoint a committee in government to ensure that the contradictions are addressed and all questions answered in order to close the controversy over the Sh320 billion project. Mr Odinga also wants the costs re-examined to ensure that there is value for money. The Cord leader also says the cost should be explained with comparisons of similar projects elsewhere. At the same time, the former PM sounded the alarm over the varying figures bandied by the government on the cost of the railway, and challenged the President and his experts to come JACOB OWITI | NATION ODM party leader Raila Odinga during the interview with the Sunday Nation at his home in Opoda Farm in Bondo District. He has called on President Kenyatta to resolve inconsistencies in the mega rail project. officials were former Transport minister Chirau Ali Mwakwere, former PS Cyrus Njiru and former Head of Civil Service Francis Muthaura. He accused the Jubilee Government of mishandling debate around the project, and encouraged the President to be more candid on the issue. “Parliament is not going to come up with solutions because the two teams are likely to reach two contradicting verdicts. The President should tone down the adversarial public approach and address the matter in-house to prevent further damage,” he said. Appoint technical team “Mr Kenyatta should manage I fear for the project. I fear that propaganda might win the war. We must isolate the chaff from the facts ... Kenya needs the railway” Mr Raila Odinga clear on the matter. “Government officers are behaving like the blind men who touched an elephant. Each had a different explanation for what he touched. That is why we have too many conflicting reports on the length of the rail, number of wagons, stations to be built and where they will be built.” Two House committees are investi- gating the award of the contract to a Chinese firm, China Road and Bridge Corporation. The contract to construct a stand- ard gauge railway was awarded without competitive bidding, and questions have been raised about the cost, legality and transparency of the process. As premier, Mr Odinga chaired the Governors’ Council chairman Isaac Rutto. Cabinet sub-committee on infrastructure which, at one time, oversaw the initial processes of the project. Other the adverse publicity which the project has attracted, and counter propaganda with facts to convince Kenyans they are not being cheated of their taxes.” Moreover, the former PM sug- gested, the President should have set up a committee to answer questions to prevent inconsistencies which have characterised government reaction. As an alternative, the former PM proposed that the President appoints a small team of technical experts to relook the process to ensure no money is lost. He says a similar team rescued the Lamu port project from similar wrangles. “What we are witnessing is a vicious commercial war fuelled by Chinese interests that were competing for the project. The same interests are fighting over a similar project in Uganda,” said Mr Odinga during an interview with Sunday Nation at his Bondo home on Friday. Government officials have said at one stage that they were following the rules laid out by the Chinese and, at another stage, they defended their action as covered by a governmentto-government arrangement. By Kenyan procurement law, China Road and Bridge should not have been awarded the contract because they also conducted the feasibility study. It is thought other Chinese companies were waiting for the announcement of the tendering process, which failed to happen. The same procurement law says a contractor can undertake a project without competitive bidding as long as a foreign government is financing 100 per cent of the project. In the case of the railway, China is financing 85 per cent while Kenya is injecting 15 per cent, which means that there should have been competitive procurement restricted to Chinese companies with a presence in Kenya, as happens in other projects. During the interview, Mr Odinga called on President Kenyatta to address all issues raised. “I fear for the project. I fear that propaganda might win the war. We must isolate the chaff from facts and propaganda. “There are vicious undercurrents behind the scenes. I am encouraging the President to ensure that propaganda does not win because Kenya needs the railway.” Mr Odinga, an engineer, said though he supports the railway project, he is doubtful about the cost, saying certain prices may be inflated. President Kenyatta has declared that the project will go on as planned, and blamed the shadowy forces that seek to derail it. The former PM said the project was conceived to protect roads by ensuring most cargo is transported by rail, and not road as is the case currently. The President has pointed out that the railway line will reduce transport costs significantly, and also reduce transit time by freight trains from 30 hours on average to eight. Apart from increasing rail transport share and thereby reducing damage to the road network, the President maintains, the project is core to the BITS AND FACTS Key players in ambitious project China Government: Covering 85 pc of the entire cost, to be treated as a loan to Kenya Parliamentary Committees on Transport and Investment: Tasked with investigating claims that deal is marred by fraud, and that awarding of contract was not in line with procurement practice China Road and Bridge Corporation: At the centre of the controversy. Was awarded the contract to construct railway line. attainment of Vision 2030. “Businesses will thrive. Thousands of jobs will be created. I, for one, believe that the delivery of that Vision 2030 can be brought forward a full decade if we implement our infrastructure development agenda within the tight time-frames we have set for ourselves,” President Kenyatta told journalists at a live news conference on Tuesday last week. Told off saboteurs He vowed to see it to completion and accused unnamed business interests of fighting projects after losing tenders. In this case, however, there had not been any competition for the project. In his statement to the Parlia- mentary Investments Committee, Transport and Infrastructure Cabinet Secretary Michael Kamau said that the project was authorised by Cabinet in August 2012, which had directed that the railway be built through a government-to-government arrangement. The Cabinet had also proposed that Uganda and Rwanda be invited into the deal to make it a worthwhile economic project.
February 1st 2014
February 3rd 2014