Kenya Kwanza accused of breaking the law in planned hotel sale

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Kenya Kwanza accused of breaking the law in planned hotel sale

The administration faces the possibility of another court confrontation due to its most recent privatisation attempt.

Recent developments reveal that the attempt to divest government-owned parastatals of some of their shares has been halted by the High Court, and the court’s instructions remain in effect.

Attorney Kevin Oriri asserts that the Kenyan government is now disregarding court orders.

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According to him, Justice Chacha Mwita has issued orders preventing the state from selling its assets until a court matter is heard and decided.

The current administration, led by President William Ruto, intends to divest its ownership of hotels, specifically the Mombasa Beach Hotel, Voi Safari Lodge, and Ngulia Safari Lodge. These hotels are now operated by Kenya Safari Lodges and Hotels Limited.

The other hotels include Golf Hotel, Sunset Hotel Limited, Mt Elgon Lodge Limited, and Kabarnet Hotel Limited.

The Privatisation Authority has initiated the search for an advisor to oversee the sale of the hotel.

In 2023, Oriri initiated legal proceedings on behalf of Journalist Gitahi Ngunyi, contesting the initial sale of 11 parastatals.

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The Orange Democratic Movement (ODM), led by Raila Odinga, filed separate cases through Jackson Awele and the Katiba Institute. These three cases were then combined into one.

Odinga secured an injunction from Justice Chacha Mwita, which halted the sale until February 6, 2024. The injunction was then extended until the hearing and resolution of the case on April 12.

Oriri argued that the Privatisation Act 2023 violates the principle of separation of powers.

“The Act undermines the oversight role of Parliament and arrogates to the Cabinet Secretary and by extension the Cabinet, arbitrary powers in a process as significant to the nation as the sale of its strategic assets,” he said.

The parastatals available for purchase include Kenyatta International Conference Centre (KICC), New Kenya Co-operative Creameries (New KCC), Kenya Pipeline Company, Kenya Literature Bureau, National Oil Corporation, Kenya Seed Company Limited, Mwea Rice Mills, and Western Kenya Rice Mills Limited.

“The Privatisation Authority invites sealed proposals from interested and eligible consultants for the provision of advisory services…on the privatisation of Kenya Development Corporation controlled hotels,” read a public notice issued on Tuesday, March 12.

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On October 9, Dr. Ruto approved the sale Bill, 2023, which allows for the quick sale of government-owned businesses without requiring the involvement of the National Assembly.

The responsibility for developing the privatisation project was assigned to the Treasury Cabinet Secretary, who is then required to obtain approval from the Cabinet for the proposed sale.

The primary function of the National Assembly is to approve the programme, however this necessitates the involvement of the general population.

The approved legislation revoked the Privatisation Act of 2005, which was put into effect prior to the enactment of the 2010 Constitution.

“It is intended to remove the bureaucratic processes in the privatisation of non-strategic or loss-making government entities,” read a statement from State House at the time.

The event was sponsored by Kimani Ichung’wah, who is both the Majority Leader and a Member of Parliament for the Kikuyu constituency.

“The Bill will also improve the infrastructure and delivery of public services through the involvement of private capital and expertise and at the same time reduce the demand for government resources.”

The state’s objective was to increase its revenue by selling what it referred to as ‘non-performing’ or ‘loss-making parastatals’.

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The Privatisation Authority has been granted the responsibility of managing the privatisation process, removing it from the jurisdiction of Members of Parliament.

“The Bill assigns the responsibility of formulating the privatization program to the Cabinet Secretary. Thereafter, the privatisation program shall be submitted to and approved by the Cabinet. The role of the National Assembly shall be to ratify the program.”

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Kenya Kwanza accused of breaking the law in planned hotel sale

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