Headache for Sakaja as City Hall debt crosses the Sh100 billion mark
Matatus on Ronald Ngala Street yesterday as Nairobi residents make last-minute Christmas shopping. Parking fees realised Sh373.9 million in the last financial year.
City Hall debt has crossed the Sh100 billion mark, putting the county government at risk of having its assets seized and auctioned.
The debt has grown by more than Sh20 billion, having stood at Sh78.1 billion on June 30, 2021.
The county government owes the Local Authorities Pension Fund (Lapfund) Sh24.9 billion in unremitted contributions.
Lapfund caters for employees of county governments and water companies. Workers contribute 12 per cent while sponsors contribute 15 per cent of the members’ gross salary.
These figures are contained in the first quarter budget implementation report for the financial year ending June 30, 2023.
The Local Authorities Pension Trust (Laptrust) is owed Sh21.1 billion by the devolved unit.
The amount is Sh6.7 billion in principal and Sh14.4 billion in accrued penalties and interest.
There is also Sh2.6 billion in contingent liabilities from Laptrust actuarial deficit and interest.
Law firms are owed Sh21.2 billion, government guaranteed loans stand at Sh15.3 billion while onlent water, foreign loans account for Sh3.8 billion.
City Hall also owes KCB Bank Sh4.5 billion in long term loans. The same amount is owed to suppliers and contractors.
In February, the High Court allowed KCB Group to seize and auction the assets of the city county government over a Sh4.3 billion defaulted loan.
Justice Chacha Mwita dismissed the devolved government’s application challenging the amount awarded by an arbitrator in November 2019.
It was after the lender moved to court in 2020 seeking recognition of the award by Phillip Bliss Aliker, an arbitrator who had been chosen by both parties.
The county government owes Kenya Revenue Authority (KRA) Sh932 million in unremitted pay-as-you-earn of Sh707.9 million, with penalties and interests accruing from the same amounting to Sh105.7 million.
The devolved government owes KRA another Sh118.5 million in VAT.
According to the report, City Hall owes the National Social Security Fund Sh282 million, Kenya Power (Sh243 million), outstanding water bills amount to Sh234 million while retirees are owed Sh222.4 million in benefits.
The report also says City Hall is owed Sh1.621 trillion, with land rates accounting for Sh1.616 trillion.
Kenya Power owes the county government Sh856 million, the national government Sh813 million for loading zone fees, sundry debtors Sh860 million, while unpaid single business permits stand at Sh549 million.
Eastlands tenants in county government houses owe City Hall Sh420 million while tenants in estates other than Eastlands are in arrears of Sh360 million.
City Hall is seeking Sh341 billion from outdoor advertisements and billboards and Sh154 million for rental market stalls.
During the period under review, City Hall realised only Sh1.2 billion against an annual target of Sh18.27 billion.
Parking fees, building permits, land rates, billboards and advertisements, house and stall rent and single business permits are the top six revenue performers.
Parking fees realised Sh373.9 million, building permits (Sh259.7 million), land rates (Sh151.8 million), billboards and advertisements (Sh96.2 million), house and stall rents (Sh81.8 million) and single business permits (Sh65.3 million).
Other revenue streams were markets (Sh50 million), liquor licences (Sh45.3 million), food handling certificates (Sh17.3 million) and fire inspection certificates (Sh5.4 million).
