MPs doubt US firm seeking Sh538bn in guarantees to invest

 

Members of the House Committee on Agriculture doubt the ability of Transteller, a US based group of companies fronted by Global Marketing Systems to deliver on the projects, given the amount of cash and land involved. Photo/JEFF ANGOTE  

By EDWIN MUTAI

In Summary

• Transteller Corporation had in its investment plan sought the guarantees as well as 250,000 acres of land for free and a 25-year tax concession on all its activities.
• Members of the House Committee on Agriculture doubted the ability of Transteller, a US based group of companies fronted by Global Marketing Systems to deliver on the projects, given the amount of cash and land involved.
• The firm wanted to invest in food processing and tapping of natural gas which is yet to be found in Kenya in commercial quantities.

The Parliament has poured cold water on an investment proposal seeking to have the government pay $7.5 billion (Sh538 billion) in guarantees to a US firm keen on diverse projects in Kenya.

Transteller Corporation had in its investment plan sought the guarantees as well as 250,000 acres of land for free and a 25-year tax concession on all its activities.

Members of the House Committee on Agriculture doubted the ability of Transteller, a US based group of companies fronted by Global Marketing Systems to deliver on the projects, given the amount of cash and land involved.

“It looks to me the proposal is very expensive to experiment with. If I were the Executive, I would not buy into it,” said Kikuyu MP Kimani Ichungua.

The firm wanted to invest in food processing and tapping of natural gas which is yet to be found in Kenya in commercial quantities.

The government, according to the proposal, would enter into a joint venture partnership and pay upfront $125million (Sh10.6 billion) in cash, into a fixed escrow account as a minimum guarantee that the projects would be completed by the company.

The government would also deposit another $25 million into an operations account that would be drawn as per the project needs.

In return, the government would only get a five per cent shareholding in kind (in the form of charitable organisations such as schools) in Global Marketing System.

Transteller managing director Godfrey Mbogori, a Kenyan living in the US, said the company would deliver the projects here in Kenya “as we have done in the US”.

“I have done many other projects in Central America where we have helped in promoting food security,” Dr Mbogori said.

He was accompanied by a co-director Thomas Motanya from Minnesota.

The committee directed the firm directors to get the Executive’s approval first before seeking its opinion.

Mr Mbogori had in 2009 approached the Treasury, the Ministry of Agriculture and former Prime Minister Raila Odinga in 2009 with the same proposal but he did not get any response.

He was lobbying the MPs to have the proposal considered by the Ministry of Agriculture.

In 2007, he approached the government with a proposal to build a super highway from Mombasa to Malaba but was turned down.