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Govt quashes "misleading" reports on debt

30 April 2014, 10:21

Nairobi - The Cabinet Secretary for Treasury, Henry Rotich, has refuted reports that the government intended to pay out KES 125 billion for Anglo Leasing contracts.

He termed the reports as misleading and untrue.

Rotich said that the government was unaware where the figure came from.

“The true position is that the amount awarded by the court was KES 1.6 billion and after negotiations this figure was reduced to KES 1.4 billion,” said Rotich.

He also clarified that the government of Kenya was taken to court in Switzerland and the United Kingdom on two contracts namely, Broadband Network Project and Bandwidth Network Projects by First Mercantile Securities Corporation and Universal Sat space respectively.

He said that the country lost both cases and the appeals as well whose payment had been suspended in 2004 when the Anglo- Leasing scandal came to light.

“The First Mercantile project involved supply of VSAT equipment by Spacenet to connect all the post offices in Kenya,” said Rotich.

He also said that though the equipment was supplied, the project was overpriced.

 “Universal Sat Space signed an agreement with GOK for provision bandwidth and network management for 10 years,” he said.

The Cabinet Secretary explained that the courts awarded both cases to the complainants to the tune of US$10.6 million and US$7.8 million respectively plus costs.

He added that there were no legal avenues left for the government as all appeals had been exhausted, and the Attorney general had advised that these amounts be paid to avoid further loss.

The cases are accruing penalty at the rate of $1 413 and $ 1 665 per day respectively translating to US$1,1 million or Sh 96,6 million per year.

 - CAJ News

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