The threat by dealers to withdraw their vehicles leased to security agencies forced the National Treasury to urgently fork out Sh5 billion to clear pending bills owed to the firms, a parliamentary committee has been told.
Treasury Principal Secretary Chris Kiptoo said the Treasury is yet to clear a balance of Sh1.8 billion owed to dealers who have leased their vehicles to the government.
“We had accumulated a balance of Sh6.8 billion pending bills for leased government vehicles,” Dr Kiptoo told the Finance and National Planning committee.
“But we had to urgently secure and pay Sh5 billion after I received a call from the Inspector General of Police informing me that the leased vehicles were being confiscated for non-payment of pending bills, ” Dr Kiptoo disclosed.
Despite the mounting pending bills, Dr Kiptoo told the committee that the Treasury is seeking additional Sh9.9 billion to facilitate leasing of additional 25,515 vehicles in the financial year starting July 1.
Treasury Principal Secretary Chris Kiptoo.
Photo credit: Dennis Onsongo | Nation Media Group
He said leasing of motor vehicles for security operations across the country is grossly underfunded and may affect operations in the country in terms of mobility of security officers.
The Treasury PS said the Sh9.9 billion for leasing of the motor vehicles has not been funded in the financial year 2025/26.
Dr Kiptoo made the disclosure when he appeared before the committee chaired by Molo MP Kuria Kimani to defend the National Treasury’s budget for the financial year 2025/26.
The Treasury has been managing the budget for leasing of motor vehicles whose budget increased to Sh11.8 billion in the year to June 2024.
The motor vehicle leasing specifically focuses on security police vehicles, including fueling and maintenance.
Dr Kiptoo told the committee that the Treasury requires Sh1.8 billion to clear the balance of pending bills in the current financial year.
He said the motor vehicle leasing project was established during the term of former President Uhuru Kenyatta as a measure of reducing costs associated with owning and maintaining vehicles by the security sector.
The National Assembly during a past session. The National Assembly has unlocked the disbursement of the Sh50.5 billion in donor support to county governments after passing the long overdue County Governments Additional Allocation (CGAA) Bill 2025.
Photo credit: File I Nation Media Group
The government previously bought vehicles from dealers and incurred costs of insurance, maintenance, and depreciation.
During the launch of the leasing programme, Treasury officials had estimated that it would make a savings of Sh4 billion under the scheme where the State pays a fee to respective dealers who then undertake to provide a certain number of insured and serviced vehicles over several years.
Dr Kiptoo tabled a document showing that the Treasury owed Sh5.6 billion to nine motor vehicles as at March 30, 2025.
The document shows that the Treasury owed CFAO Mobility Kenya Limited Sh2.17 billion, CMC Motors Group Ltd (Sh1.14 billion), Total Energies Marketing Kenya Plc (Sh514.58 million), M/s Crown Motors Group Ltd (Sh286.45 million,), M/s ECTA Kenya Limited (Sh240.95 million), Gaptech Solutions Ltd (Sh90.9 million) and Urysia Company Limited (Sh14.65 million).
Dr Kiptoo said the Treasury is unfunded to the tune of Sh42.98 billion which includes Sh17.89 billion for equity and subscription in international financial institutions, Sh11.12 billion for strategic investments in public entities, Sh4.4 billion for Credit Guarantee Scheme, Sh1.15 billion county integrated revenue management scheme.
Dr Kiptoo said the allocation to strategic investments in public entities will provide sustainability financing for public entities.
He said the Treasury lacks Sh1 billion that is required to undertake development of Phase II e-Government Procurement (e-GP) system modules, piloting of e-GP in 12 Ministries, Departments and Agencies, Phased training of e-GP system end users in MDAs, training of suppliers on e-GP system supplier registration module and roll-out of the e-GP system to all MDAs from July 2025.
“We will require Sh3 billion to fully implement the e-GP. We spend about Sh1.2 billion annually for Integrated Financial Management Information System (IFMIS) licenses and maintenance,” Dr Kiptoo said.
“We also require Sh638 million for IFMIS re-engineering Phase II. This is to upgrade the IFMIS system to facilitate seamless transition from cash to accrual accounting.”
The Treasury has been allocated a total budget of Sh118.38 billion out of Sh71.22 billion will be spent on recurrent expenditure while Sh47.17 billion has been allocated for development.
