Home News We lost over Sh2b revenue to SGR, Joho now says

We lost over Sh2b revenue to SGR, Joho now says



Mombasa Governor Ali Hassan Joho when he appeared before Committee on County Public Account and Investments (CPAIC) chaired by Senator Ochilo Ayacko at the Kenyatta International Conference Centre (KICC) Nairobi. July 6, 2021 [Elvis Ogina, Standard]

Mombasa County Government lost close to Sh2 billion in revenue collection since operationalisation of the Standard Gauge Railway (SGR) in 2018.

The multi-billion shilling project is President Uhuru Kenyatta‘s flag-ship that saw the Madaraka Express roar to life after many years. However, Mombasa Governor Hassan Joho said SGR has led to a huge dip in revenue collection.

Appearing before the Senate County Public Accounts and Investments Committee (CPAIC) to answer audit queries, Joho blamed the situation to stalled hospital and Early Childhood Development (ECD) projects.

The county chief also took issue with financial constraints that have had a negative impact on development projects and the national government’s decision to continue running Kenya Ferry, Kenya Ports Authority (KPA), Port Health, and Kenya Medical Research Institute (Kemri).

Finance County Executive Committee (CEC) Maryam Mbaruk said the SGR adversely affected the logistic sector, a major revenue stream for the county.

“Over the years, revenue has been increasing exponentially but due to the operationalisation of SGR in late 2018, revenue has taken a dip,” said Mbaruk.

She added: “A number of ventures within the logistics sub-sector have actually closed shop. We have lost between Sh1 to 2 billion, and this is going to increase if no measure is taken to ensure the county benefits from the SGR.”

The county government said by transporting cargo through SGR led to some transporters shutting down their businesses and relocated to the Central Business District (CBD).

According to the audit 2018//2019 audit query, the department of education undertook to construct eight ECD classrooms in eight locations during the 2014/2015 financial year.

The project was to be undertaken at a cost of Sh214,173,840. The contract which had a duration of 32 weeks commenced in May 2014 and was to be completed in December 2015.

“However, only six ECDs had been completed while remaining two were at various stages of completion at the time of audit in October 2019, a delay of four years,” states the report.

According to the report, the contract extension resulted into total price variation increase of Sh16,314,651 which could have been saved had the projects been completed on schedule.

“The county executive may not fully finance its budget activities which in turn may adversely affect delivery of goods and service to residents of Mombasa County,” states the report.

In response to the committee chaired by Migori Senator Ochilo Ayacko, Joho said in the 2014/2015 financial year, the county projected collecting local revenue as it assumed that majority of government functions were to be devolved including Kenya Ferry, Kenya Ports Authority, Port Health and Kemri.

“When these functions were not devolved, the county resolved to stagger the ECD projects because of their high capital injection as they included dining halls, first aid clinic and robotics. The remaining two ECDs are at 70 per cent and are expected to be completed in the current financial year,” said the governor.

The county cited same reasons for its inability to complete five sub-county hospitals at Shika Adabu, Marimani, Mtongwe, Vikwatani and Chaani in the 2014/15 financial year.

The hospitals were to be completed by December 2015.

A physical verification of the projects in October, 2019 revealed that only three had been completed.

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