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Government Comes Clean connected Using Fuel Levy to Secure Ksh175B Loan
The Ministry of Roads and Transport has responded pursuing reports that the authorities utilized the substance levy to unafraid a Ksh175 cardinal loan.
Transport Cabinet Secretary Davis Chirchir, successful a connection connected Wednesday, July 16, said that the inaugural is aimed astatine raising funds for the colony of verified pending bills successful the roads sector, totalling Ksh175 billion.
According to CS Chirchir, this fiscal solution has been implemented done the Kenya Roads Board (KRB), a statutory assemblage established nether the Kenya Roads Board Act, Cap. 408A of the Laws of Kenya (the Act).
“When the Kenya Kwanza medication assumed office, it inherited a important backlog of pending bills successful the roads sector, amounting to Ksh175 billion. These bills arose from commitments made by the erstwhile administration, yet remained unpaid, starring to the suspension of implicit 580 roadworthy projects crossed the country,” work portion of the statement.
“The backing spread placed immense unit connected the government’s improvement agenda, negatively impacting contractors, workers, and communities awaiting the completion of captious roadworthy infrastructure.”
CS Chirchir said that the authorities considered respective financing options to code these obligations, among which, securitization emerged arsenic the astir viable and legally dependable mechanics to unlock funds successful a mode that does not load the exchequer with further debt
Securitization to unlock Ksh178 billion
The CS emphasized that the determination was made transparently, with afloat adherence to the law, and successful enactment with champion fiscal practices.
Also Read: How KRB is Using Securitization to Solve Infrastructure Funding Gap
He further maintained that the securitization is not the instauration of caller indebtedness but the merchantability of the rights by KRB to a Special Purpose Vehicle (SPV) to person a information of the aboriginal Road Maintenance Levy, specifically Ksh7 from the existent Ksh25 per litre levy.
“The SPV, operating arsenic an autarkic entity, raises funds upfront based connected these rights and uses those funds to wide the verified pending bills. Crucially, this process is without recourse to the KRB, meaning that the Board bears nary work oregon liability beyond the merchantability of these circumstantial rights,” added CS Chirchir.
“This financing attack ensures that contractors are paid promptly, stalled roadworthy projects are revived, and communities payment from improved infrastructure, each without adding to Kenya’s nationalist indebtedness burden. It besides guarantees that the Road Maintenance Levy volition proceed to money roadworthy attraction and improvement arsenic planned, portion a intelligibly defined information is channeled towards addressing humanities liabilities.”
The authorities has maintained that securitization was executed with utmost transparency, legality, and accountability, adding that each statutory requirements were fulfilled, and the process underwent owed diligence, approvals, and oversight by the National Treasury and the Attorney General’s bureau to guarantee compliance with Kenya’s fiscal laws.
“We privation to reassure the nationalist that determination is nary secrecy successful this process. The Kenya Roads Board has, and volition proceed to, prosecute openly with stakeholders, Parliament, the media, and the nationalist to explicate the structure, benefits, and safeguards of this innovative financing solution,” the CS added.
Ndindi Nyoro speaks connected substance levy
The clarification comes aft Kiharu Member of Parliament portion criticising the authorities connected the causes of the surge successful substance prices connected Tuesday, claimed that the authorities softly added a Ksh7‑per‑litre levy successful 2023, contempt falling planetary prices, thereby preventing alleviation astatine the pump.
Also Read: EPRA Hikes Fuel Prices for July 15 – August 14
Nyoro dismissed the authoritative relationship that planetary lipid prices are to blasted for the emergence arsenic misleading, pointing retired that “global lipid prices peaked past year, not this year,” a assertion supported by marketplace data.
The lawmaker further argued that home factors, specifically “excessive taxation and the securitisation of substance levies”, were the existent causes down the spike successful pump prices.
“In an oil-importing state similar Kenya, the lone effectual instrumentality the authorities has to stabilise substance prices is adjusting taxes. Sadly, this is wherever the authorities is failing,” helium said.
Nyoro highlighted that Kenyans wage implicit Ksh80 per litre of petrol and Ksh76 for different fuels successful nonstop taxes and levies.
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Kiharu Member of Parliament (MP) Ndindi Nyoro. PHOTO/Ndindi NyoroThis station Government Comes Clean connected Using Fuel Levy to Secure Ksh175B Loan archetypal appeared connected The Kenya Times ~ Trending, Breaking News and Videos and is written by Jason Ndunyu
