TA tells defunct local authorities creditors to file claims

Transition Authority chairman Kinuthia Wamwangi. PHOTO | FILE 

By OTIATO GUGUYU, dotiato@nationmedia.co.ke

In Summary

• TA’s technical Committee for Transfer of Assets and Liabilities says no claims against counties will be accepted from creditors after December 12.
• The agency has also advised all counties to withhold payment of any debt until the verification of assets and liabilities belonging to defunct local authorities is completed at the end of the year.

Contractors and suppliers seeking millions of shillings from defunct local authorities have up to Friday to submit their claims to the Transition Authority (TA) for verification.

TA’s technical Committee for Transfer of Assets and Liabilities says no claims against counties will be accepted from creditors after December 12.

The agency has also advised all counties to withhold payment of any debt until the verification of assets and liabilities belonging to defunct local authorities is completed at the end of the year.

“Some creditors of the defunct local authorities have been going to court to obtain claims for unverified liabilities. We are advising counties not pay out until the claims are substantiated,” said the committee’s chair, Bakari Omar.

He said county officials found to have made payment for falsified claims would face the law.

TA had earlier issued a moratorium banning transfer of local authorities’ assets and liabilities during the three-year transition period without its approval.

Mr Omar said the agency is at the last stages of completing the verification process that began in October this year.

Land, buildings, motor vehicles, computers, furniture, plant and equipment are part of the assets to be validated.

The process will also review all loans, unpaid emoluments, unremitted statutory deductions, legal fees, and claims by contractors, suppliers and consultants.

Counties inherited huge debts from the defunct local authorities, including contingent liabilities and huge penalties for non-payment from retirement benefit schemes.

Nairobi County for instance owes the National Social Securities Fund (NSSF ) Sh194 million, Sh3 billion is owed to the Local Authorities Pension Trust (Laptrust) fund, Sh1billion in litigations and Sh15 billion in foreign loans.

READ: Nairobi County saddled with Sh44 billion debt

NSSF charged Sh668 million in penalties while Laptrust charged Sh1 billion. A similar amount was charged by the Local Authorities Provident Fund (Lapfund).

Mr Bakari, however, stated that if the engagements are too high TA would engage the Treasury and development partners to help offset the debts, adding that the World Bank had already showed commitment to intervene.

TA also gave a stern warning to private developers targeting the land along the Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) corridor in order to reap big from compensation for the project.