BUDGET 2009/2010 CREATES A SECRET FUND INVOLVING MILLIONS OF US DOLLARS. WHY
WAS PARLIAMENT NOT TOLD ABOUT THIS?

BUDGET 2009/2010 SERIES 001

Buried in the Finance Bill that the Minister of Finance, Uhuru Kenyatta tabled in Parliament last week is a proposal to amend two laws in order to create a fund whose purposes are barely specified. The Fund could be worth over 1 and a half billion shillings per annum, yet total discretion will be given to a parastatal corporation board who will decide how this money will be spent, without external oversight. The parastatal corporation which will be the legal owner of the fund is notorious for corruption and the parent ministry of Transport is behind at least some of the Anglo Leasing scams that cost the Treasury dearly since the mid 1990s.

In a clever side-stepping of Parliament, the law is to be changed to allow this parastatal corporation to borrow using its sink fund as collateral, avoiding the need to satisfy investors’ demands that it charge or mortgage its real assets – a practice specifically prohibited by Kenyan law. Why these legal changes are being done is a mystery as the issue did not feature at all in the 3 hour long Budget Day speech of last week.

If Parliament passes the Finance Bill without amendment it may just authorise the beginning of a series of unaccountable transactions involving potentially hundreds of millions of dollars, as the parastatal corporation has already signed contracts with external financiers for massive infrastructural projects.

The name of the parastatal corporation is…the Kenya Airports Authority

The amendments are to be made to the Kenya Airports Authority Act and the Air Passenger Service Charge Act. Subject to the latter every person who purchases a ticket for an external or internal journey must pay a passenger service tax of (20) twenty United States dollars or the equivalent in specified currency or in
Kenya shillings for an external journey; and (100) one hundred shillings for an internal journey.

The amendments’ effect is that henceforth rather than paying taxes into the Consolidated Fund from which it can only be withdrawn as per the National Budget or with Parliamentary approval, the Kenya Revenue Authority shall,after deducting its expenses, pay all Air Passenger Service Tax into the newly created Kenya Airports Authority Fund. The amendments do not create an independent
board of Trustees of the Fund, and the management of the Fund is left completely to the existing Management of the Kenya Airports Authority.

Under the amended law, the Kenya Airports Authority will be authorised to pay “out of the Fund any expenditure incurred by the Authority in the exercise of its powers or the performance of its functions under this Act.”

Parliament should consider whether it ought to approve these amendments…. read the full post at http://blog.marsgroupkenya.org/?p=922

www.marsgroupkenya.org

Watching out for You

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Date: Sun, 14 Jun 2009 07:36:20 +0100
From: Mars Group Kenya
Subject: NYC Mars Group Kenya Update : BUDGET 2009/2010 CREATES A SECRET FUND INVOLVING MILLIONS OF US DOLLARS. WHY WAS PARLIAMENT NOT TOLD ABOUT THIS?