Uproar over hefty cost of parastatals’ Mombasa meeting

Corporate News

A ship docks in Mombasa. Kenya is eyeing more Ethiopian goods to pass through its ports. PHOTO | FILE 

By DAVID HERBLING, hdavid@ke.nationmedia.com

An ongoing meeting bringing together all executives of State corporations has caused an uproar after a consumer lobby raised queries over the seminar’s fat budget estimated to cost taxpayers hundreds of millions of shillings.

The Consumer Federation of Kenya (Cofek) now wants the three-day meeting immediately called off following revelations that the government directed all State corporations to pay Sh60,000 to cater for full board accommodation and training for each of their board members, including chairmen and chief executives.

There are also questions on how Mombasa Continental Resort was handed the lucrative deal as the host of the meeting named “induction programme for boards of State corporations.”

Kenya has a total of 262 government-owned entities with each having an average board size of eight, according to findings by the task force on parastatal reforms released in October 2013.

At the rate of Sh60,000 per participant, the meeting will cost taxpayers about Sh125 million, assuming that each State corporation pays for eight board members.

“Nearly 90 per cent of the parastatals are headquartered in Nairobi. Why was the training conducted in Mombasa?” posed Cofek secretary general Stephen Mutoro, who estimates that the training, hotel bookings and travel costs and allowances could cost a total of Sh600 million.

The meeting – to be held in segments of about 60 directors per session – is organised by the State Corporations Advisory Committee and is meant to train board members on a new set of corporate governance rules dubbed “Mwongozo.”

The committee’s secretary Jane Mugambi directed each State corporation to deposit in full the training fees – which excludes transport to and from the venue – in the hotel’s account held at NIC Bank.

“Each State corporation will meet the expenses of the training which have been costed at Sh60,000 per participant (excluding transport to and from the venue),” said Ms Mugambi in a letter dated September 16, 2015 seen by the Business Daily.

“You are required to pay the sum of money equivalent to the number of your board members at least three days before your training, to the hotel’s account,” reads the letter addressed to all parastatals and copied to Head of Public Service Joseph Kinyua.

Mr Mutoro said the meeting runs contrary to the values and principles of public service spelt out in the Constitution which call for “efficient, effective and economic use of resources.”

Cofek has reported the matter to the anti-graft agency and wants individual board members taking part in the meeting to be surcharged the amounts they have spent.

Mr Mutoro reckons that the training should have been held at the State-owned Kenya School of Government, which has campuses in Nairobi, Mombasa, Matuga, Embu and Baringo.