ICDC seeks nod to write off Sh27.5bn in defaulted loans

Ms Janet Kabui Gathungu, the Auditor-General nominee. FILE PHOTO | NMG

By EDWIN MUTAI
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Summary

• The report shows the corporation had a loan portfolio totalling Sh29.7 billion as of the end of June 2018 out of six per cent or Sh1.8 is recoverable.
• Ms Gathungu says the ICDC management had made provisions for the whole amount of non-performing loans under its loan provisioning policy and filed an application to the Treasury for the write-off of the loans.
• ICDC has a mandate of facilitating the industrial and economic development of Kenya by aiding in the initiation, assistance or expansion of industrial, commercial and other entrepreneurial undertakings.

The Industrial and Commercial Development Corporation (ICDC) is seeking approval from the Treasury to write-off debts worth Sh27.5 billion, a new audit report tabled in Parliament shows.

The report shows the corporation had a loan portfolio totalling Sh29.7 billion as of the end of June 2018 out of six per cent or Sh1.8 is recoverable.

“The remainder loans totalling Sh27,536,927,000 equivalent to 94 per cent of the portfolio are considered by management as unrecoverable,” said Auditor-General Nancy Gathungu in a qualified audit report dated October 7, 2020.

Ms Gathungu says the ICDC management had made provisions for the whole amount of non-performing loans under its loan provisioning policy and filed an application to the Treasury for the write-off of the loans.

“However, in the absence of records on the loans, it is not possible to confirm the criteria applied in selection the loans provisioned for an eventual write-off.

“In view of the missing information, it is not possible to confirm the accuracy, completeness and validity of the loans and advances balance totalling Sh1,809,966,000,” she said.

ICDC has a mandate of facilitating the industrial and economic development of Kenya by aiding in the initiation, assistance or expansion of industrial, commercial and other entrepreneurial undertakings.

But in August, ICDC took control of four mega multi-billion shillings infrastructure entities following President Uhuru Kenyatta’s decision to merge port, railway and pipeline services.

The merger brought together Kenya Ports Authority, Kenya Railways Corporation and Kenya Pipeline Company under the coordination of the ICDC.

Under the new arrangement, ICDC will act as a holding company to the three agencies and be responsible for the management of the State’s investments in ports, rail and pipeline services. The government-owned financial institution now oversees rail, pipeline and port operations, which will be brought together under the Kenya Transport and Logistics Network.