City Hall contractors with ongoing projects awarded in the financial year ended June 30, 2019 will now be paid their outstanding debt totaling Sh1.3 billion.
This is after Nairobi County government handed over the pending bills under the four transferred functions to the Nairobi Metropolitan Services (NMS) for processing of payment.
Two weeks ago, Nairobi County Assembly Speaker Benson Mutura, while still the acting as Governor, said the county government had begun the process of scrutinising the pending bills owed to contractors and suppliers.
This is after the court allowed the county government to enter into consent over implementation of the county’s Sh37.5 billion budget.
A report by the Auditor General on pending bills revealed that Nairobi County has Sh10.67 billion eligible pending bills with only Sh4.1 billion paid.
Out of this, City Hall has only paid contractors and suppliers Sh1.1 billion with another Sh3 billion to the Kenya Revenue Authority in value-added tax and pay-as-you-earn arrears.
Nairobi Deputy Governor Anne Kananu urged NMS Director General Mohamed Badi to prioritise payment of the pending bills in the first item of expenditure on their budgets for the 2019/2020 financial year.
She said that the amount was settled at after the county government and NMS formed a committee to look into all the contracts and files of accumulated pending bills for 2018/2019 financial year.
Ms Kananu decried how the accumulation of the pending bills has been an issue of concern in the past with the county government unable to pay contractors and suppliers for goods and services supplied.
This is sometimes because of cash deficit in the county government as a result of delayed transfers from the national government, own source revenue shortage, disputed payments and delayed legislation such as the recent Senate stalemate on revenue sharing formula.
However, she said going forward the county government will adopt a phased approach to settling outstanding arrears, even if it means settling bills in installments in certain circumstances in order to restore liquidity for business owners.
“We know that late settlement of debts attracts interest and penalties for respective suppliers. Additionally, when bills remain unresolved and unpaid for far too long counties lose their credibility with suppliers and contractors,” said Ms Kananu.
On his part, Major General Badi assured the contractors that going forward they will have their payments effected in time as the hiccups between the county government and NMS that had frustrated payments is now in the past.
“It has been a long journey but we are happy it has borne fruits. I would like to assure the contractors that nothing is lost from now moving forward as we will be working together with the county government and the assembly to ensure service delivery is done and residents don’t suffer,” he said.