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16th July 2021 Parliamentary Round Up

NATIONAL ASSEMBLY 

The National Assembly is on short recess and will resume on Tuesday, 3rd August 2021 at 2.30 p.m.

SENATE 

PAPERS LAID

The following papers were laid at the Table of the House:

  • Report of the Standing Committee on Health concerning the Community Health Service Bill, 2020 (Senate Bills No. 34 of 2020)
  • Annual Financial Report of the National Police Service Commission for the year 2019/2020

COMMUNICATION FROM THE CHAIR

Expediting Consideration of Senate Bills Pending Before the House

On 29th October, 2020, the High Court delivered a judgment in Constitutional Petition No. 284 of 2019 where it issued a number of declarations and issued orders that affected a number of Senate Bills pending before both Houses. In compliance with the Orders, the Senate republished all Bills for which the resolution contemplated pursuant to Article 110(3), could not be demonstrated.

The High Court also ordered that “it is mandatory and a condition precedent for any Bill that is published by either House to be subjected to a concurrence process to determine in terms of Article 110 (3) of the Constitution whether the Bill is special or an ordinary Bill”. As at now, a total of 58 Bills have been published. Out of the 58 Bills, 21 are undergoing concurrence pursuant to Article 110(3), 30 are at the Second Reading stage, and three Bills are at the Committee of the Whole stage. One Bill was referred to the National Assembly while three Bills have been assented to.

Owing to the workload and pressure to finish the pending Bills within a very limited time to the end of the term of the 12th Parliament, at its meeting held on Tuesday, 6th July, 2021, the Senate Business Committee (SBC) considered a paper on “Proposal for expediting consideration of Senate Bills republished pursuant to High Court Judgment in Constitutional Petition No. 284 of 2019” and resolved that a meeting be convened to apprise Senators on the effects of the Judgment and to establish a framework to expedite the legislative business before the Senate.

As such, the Senate Leadership prepared a half-day workshop to be held in Nairobi on Thursday, 15th July, 2021 from 8.00 a.m. to 12.30 p.m. to deliberate on: –

  1. Implementation of the High Court Judgment in Constitutional Petition No. 284 of 2019; milestones, challenges and opportunities;
  2. Status of Legislative Business: Bills, Motions, Petitions and Statements;
  3. Framework for expediting pending Legislative Business; and
  4. The way forward.

MESSAGES

The House received two messages from the National Assembly regarding:

  1. The passage of the Public Collections Bill (National Assembly Bills No. 66 of 2019), and
  2. The approval of the Public Finance Management (Equalization Fund Administration) Regulations, 2021, (Legal Notice No. 54 of 2021).

BILLS

First Reading

Orders for the First Reading of the following Bills were read and the Bills were ordered to be referred to the relevant Committee;

  • The Lifestyle Audit Bill, (Senate Bills No. 36 of 2021) by Sen. (CPA) Farhiya Ali Haji, MP
  • The Intergovernmental Relations (Amendment) Bill, (Senate Bills No. 37 of 2021) by the Chairperson, Standing Committee on Devolution and Intergovernmental Relations.
  • The County Governments (Amendments) Bill, (Senate Bills No. 38 of 2021) by Sen. Moses Otieno Kajwang’, MP

Second Reading

The following Bills were coming up for a Second Reading;

  • The National Flag, Emblems and Names (Amendment) Bill (Senate Bills No. 36 of 2020) by Sen.(Dr.) Agnes Zani, MP.
  • The County Vocational Education and Training (Senate Bills No. 6 of 2021) by the Chairperson, Standing Committee on Education.
  • The Parliamentary Powers and Privileges (Amendment) Bill (Senate Bills No. 33 of 2020) by Sen. (Dr.) Agnes Zani, MP.

STATEMENTS

The following Statements were raised on the floor of the House among others:

Treatment Equipment and Facilities at Mbagathi Referral Hospital

Nominated Senator (Sen. Beatrice Kwamboka Makori, MP) sought a statement from the Standing Committee on Health regarding the status of treatment equipment and facilities at the Mbagathi Referral Hospital; In the Statement, the Committee should:

  1. Outline the number and condition of computerized CT Scan machines available for patients seeking treatment at the hospital;
  2. State the amount of medical oxygen available for use by the patients
  3. Elaborate on the bed occupancy versus capacity of the hospital’s intensive care unit.
  4. Explain reasons as to why there are only two ventilators yet the hospital requires 8 and has the requisite space to accommodate the ventilators.

Status of Mumias Sugar Company Limited and its Impending Take Over

The Chairperson, Standing Committee on Agriculture, Livestock and Fisheries made a Statement on the state of Mumias Sugar Company Limited and its impending takeover/resuscitation.

The Statement notes that at a sitting of the Senate held on 2nd June, 2021, Senator Cleophas Malalah, MP requested for a statement from the Chairperson of the Standing Committee on Agriculture Livestock and Fisheries on requested for a Statement from the Chairperson of the Standing Committee on Agriculture, Livestock and Fisheries on the state of Mumias Sugar Company Limited and its impending take over. In the Statement, the Senator sought the following –

  1. The current state of the company’s asset and liabilities indicating the value and core and non-core assets and which entity undertook such evaluation, if any.
  2. The fate of the current receiver manager.
  3. Details of when and by whom, the decision to lease out the company was made and any correspondence on the said decision to the Capital Market Authority (CMA) and other regulatory bodies.

Also to provide details of the following:

  1. Procedure to be followed by the Government in selling its stake in the company and the biding process including who the bidders were, when the bidding took place;
  2. When the evaluation of submitted tenders was done; what criteria was used to pick the successful tenderers;
  3. What were the relevant legal instruments under which the process of leasing was conducted;
  4. Whether there was public participation in the process and which other companies submitted their bids for the tender and when they were invited to bid;
  5. The companies’ revival plan and details of the entity deemed to be qualified to take over Mumias Sugar Company Limited and a justification for the same;
  6. Whether stakeholders were consulted and a report of such consultations, if any, including the creditors and debtors and who shall pay the pending debts owed by the company particularly debts owed to farmers and workers.

The Committee met with the receiver manager, Mumias Sugar Company Limited, Mr. Ponangipalli Venkata Ramana Rao on Wednesday 9th June, 2021. He briefed the Committee as follows:

  1. A restraining order was issued by the courts restraining the sale of immovable assets of the Company on 6th November, 2019, which order was thereafter varied on 12th May, 2021 to include movable assets. The Order has limited debt recovery options and available options to restart the Company’s operations;
  2. The Receiver Manager restarted distillery operations in February, 2020, however, this faced several challenges e.g. shortage of molasses and high costs of transportation of molasses and bagasse from other factories. Further, the Receiver Manager also began development in the Nucleus Estate from marginal revenue derived from the distillery, however, the distillery operations were suspended in March, 2021 following directions from the Ethanol Plant Lenders;
  3. The developments left the Receiver Manager with only one option of leasing the Company’s assets to revive its operations and progress recovery efforts for the secured creditors and other stakeholders of the Company;
  4. As per Audited Financial Statements for the FY 2018, the value of the Company’s assets was Kshs15.7 billion while its liabilities were Kshs30.1 billion. The net assets position stood at a negative Kshs14.4 billion, implying that the Company would not be able to meet its long term and short term financial obligations from its assets and was therefore insolvent;
  5. The Company’s assets may have deteriorated and its liabilities increased from June 2018, owing to additional interest and penalties on loan repayment default, tax arrears etc. The latest book values of assets and liabilities was not able to be availed in the absence of the Statement of Company Affairs from the Company’s directors. However, asset valuation undertaken through Centenary Valuers Ltd in November, 2019 estimated the market value of the Company’s assets to be Kshs18.4 billion;
  6. The Receiver Manager would continue to run the affairs of the Company until such a time when the full amount owed to the secured lenders was recovered or until his appointment came to an end for any other reason;
  7. The decision to lease the Company’s assets was discussed with KCB and the Governor of Kakamega County. Necessary consents were also obtained from the national and county governments, secured lenders and other stakeholders like the Capital Market Authority (CMA), Nairobi Stock Exchange (NSE), the Agriculture and Food Authority (AFA) and the National Treasury
  8. The Government could sell its stake by transferring its shares to any other party for payment or any other consideration, however, as per Financial Year 2018 Audited Financial Statements, the shareholder value in the Company stood at Kshs14.4 billion, making it unlikely that any investor would be interested in purchasing a stake in the Company;
  9. The Receiver Manager opted for private treaty as opposed to public tendering as it is less expensive and much faster. The bidding process began in the first quarter of 2020 and was kept open for a year as the Receiver Manager was keen to obtain the best offer. Eight bidders submitted their bids including
    • Catalysis Group, Russia;
    • Sarrai Group, Uganda;
    • Kruman Associates, France;
    • Kibos Sugar;
    • Devki Group;
    • Premier JV, India;
    • Third Gate Capital Management; and
    • Godavari Enterprises India.

10. Evaluation of the bids began on 16th April, 2021 using the following criteria-

  • Technical capability;
  • Financial ability to undertake large operations;
  • Lease period;
  • Initial security deposit;
  • Initial moratorium period;
  • Lease rent amount;
  • Out of Crop (OOC) period;
  • Liquidated damages on third party interference;
  • Ability to revive the operations; and
  • Socio-economic aspects and community welfare.
  • On the matter of public participation, a private treaty was chosen, however, the proposed leasing was carried in the media for several months. The Governor of Kakamega County has been kept apprised on developments, engagements have been made with area MPs, secured lenders, NSE, CMA and the National Treasury.

The following queries were raised by Members and the Receiver Manager made the following clarifications

  1. That, there was currently no lease agreement in place for the leasing of the Mumias Sugar Company Limited as the bidding process was ongoing and no bidder had been awarded the bid;
  2. That, the Receiver Manager had not advertised for the proposed leasing of the Company and instead preferred private treaties which were cheaper, more convenient and faster than the advertisement process;
  3. That, the Receiver Manager, was not in receipt of any withdrawal of a bidder, despite media reports that Devki Group had withdrawn its bid;
  4. That at the start of the receivership, the Company owed Kshs2.6 billion and currently owes Kshs2.765 billion as a result of accrued interest;
  5. That, a minimum of Kshs3 billion, in the opinion of the Receiver Manager, would be necessary for investment into the Company for its revival. However, no technical evaluation had been carried out; and
  6. That, there was no conflict of interest on the part of the Receiver Manager in dealing with Devki Group.

Following deliberations and noting the need for transparency and public participation, the Committee resolved that the following be undertaken by the Receiver Manager:

  1. Advertisement of the intention to lease Mumias Sugar Company Ltd. within two weeks; and
  2. Submission of a technical evaluation report for Mumias Sugar Company Ltd. to the Committee.

Vide a letter dated 23rd June, 2021, the Receiver Manager sought extension of time to end of July, 2021 to publish the advertisement and submit the technical evaluation report to the Committee. The Committee resolved to invite the Receiver Manager to a meeting to discuss the request and to receive an update on the progress made by his office in implementing the Committee resolutions.

At a meeting held on Friday, 2nd July, 2021, the Committee met with the Receiver Manager, where he gave reasons for his request for extension of time as:

  1. To prepare detailed bid documents to maintain uniformity of the bids; and
  2. To discuss the modalities with all stakeholders before the Invitation to International Bidding was advertised in local and international media.

He further informed the meeting that there were two applications before the courts seeking to stop the leasing of the Company, which would possibly interfere with the process. Following deliberations, the Committee resolved that the Receiver Manager should advertise the intention to lease Mumias Sugar Company Limited and submit the technical evaluation report by 31st July, 2021. The Committee further resolved that a follow up meeting would be held on 6th August, 2021.

Activities of the Committee on Information and Technology

The Chairperson, Standing Committee on Information and Technology made a statement relating to the activities of the Committee for the period commencing 9th February, to 19th March, 2021.

During the period under review, the Committee held a total of six sittings. The membership of the Committee changed by resolution of the Senate on 29th January, 2020.

The Committee held an induction retreat from 18th to 20th March, 2021 in Mombasa County. The retreat was an opportunity to engage with other stakeholders from Government, private and civil society in the ICT sector, and also served as a working planning retreat for the Fifth Session of the 12th Parliament. During the retreat, the Committee took a closer look at the following project of the national Government with the focus on the points of interface with county governments –

  1. Provision of broadband to schools, which is being undertaken through the school programme in collaboration with UNICEF.
  2. The modernization of the Kenyan News Agency.
  3. The studio Mashinani project, a collaboration between the national broadcast and the Ministry of Information, Communication and Technology. It seeks to develop a local creative industry by enabling young people to tap into their natural creative curiosity and effectiveness by taking recording studios to the grassroots level with the majority of talented youth desired.
  4. The Presidential Digital Talent Program (PDTP) takes fresh and qualified ICT graduates through an internship program designed to build the ICT capabilities ready for the ICT market. The interns are placed both in Government ministries for ten months and in the private sector for two months. During the program, they get a holistic understanding of how ICT works both in the public and private sector.

Ajira Digital Program, a project being implemented by KEPSA in partnership with the Government of Kenya through the Ministry of Information Communication and Technology aims at bridging the gap between skills, demand and lack of jobs and further seeks to gather lessons learnt to inform the project scale-up. Ajira digital project seeks to position Kenya as a choice of labour destination for multinational companies as well as encourage local companies and the public sector to create digital work. The overall objective of the project is to make Kenya a freelance hub on the global destination for online work by the year 2022; among other projects seeking to liberate ICT for the economic transformation of the country.

During the retreat, the Committee engaged with semi-autonomous Government agencies and access the sector’s achievements and challenges. They include-  the ICT Authority, the Communications Authority of Kenya, KONZA-TechnoPolis Development Authority, the Government Advertising Agency, the National Communication Secretariat, the Communication and MultiMedia Appeals Tribunal, Kenya Institute of Mass Communication, Kenya Film Classification Board, Kenya Film Communication and the Media Council of Kenya. Mobile network connectivity that enables a minimum of second generation 2G internet connectivity across the country has also been a primary commitment of the Committee.  

To this end, the Committee held numerous engagements with the Communication Authority of Kenya in 2020 to oversee the role of the mobile network connectivity to unserved paths and the served parts of the country using the Universal Servers Fund (USF). Phase II of the connectivity initiative is underway. It will provide coverage of 101 sub locations in 18 counties. Moreover, the CAK has set in motion plans to deploy Phase III of the project that brings the country to full coverage with no Kenyan left behind.

In quarter II of the calendar year 2021, the Committee will be focusing on the following areas –

  1. E-education -the committee is conscious of the need for collaborative effort to build a hybrid educational system in Kenya. It will delve deeper into the various initiatives geared towards e-education, focusing on connectivity to schools throughout consultative meetings in the Ministry of Education and the Ministry of ICT.
  2. Data protection continues to take centre stage in emerging discourse. The Committee will review the Draft Data protection regulations that will operationalize the Data Provision Act of 2019.
  3. In respect of statements at the sitting of the Senate held on 23rd March, 2021, Sen. Samson Cherargei, MP, requested a Statement from the Chairperson of the Standing Committee on Information Communication and Technology on the status of the Access to Information Regulations in the Access of Information Act, 2016. 

Other Statements

  • The Chairperson, Standing Committee on National Cohesion, Equal Opportunity and Regional Integration made a statement relating to the activities of the Committee.
  • The Chairperson, Standing Committee on National Security, Defence and Foreign Relations made a statement relating to the activities of the Committee.
  • The Chairperson, Standing Committee on Tourism, Trade and Industrialization made a statement relating to the activities of the Committee.
  • The Chairperson, Standing Committee on Roads and Transportation made a statement relating to the activities of the Committee.
  • Nominated Senator (Sen. Rose Nyamunga, MP), made a statement concerning the insecurity menace caused by the ‘Boda Boda’ industry and the resultant effect on the economy.
  • Nominated Senator (Sen. (Arch.) Sylvia M. Kasanga, MP), made a statement concerning the Kenya Mental Health Action Plan (2021- 2025).
  • The Senator for Nandi County (Sen. Samson Cherarkey, MP) sought a statement from the Standing Committee on National Security, Defense and Foreign Relations concerning the issue of mounting, regulating and controlling of police road blocks in Kenya.
  • The Senator for Kericho County (Sen. Aaron Cheruiyot, MP), sought a statement from the Standing Committee on Justice, Legal Affairs and Human Rights concerning the closure of Kericho Law Courts.
  • Nominated Senator (Sen. Mercy Chebeni, MP) made a statement concerning the increase of violence against children.
  • Nominated Senator (Sen. Rose Nyamunga, MP), sought a statement from the Standing Committee on Labour and Social Welfare concerning the status of the Kenya Youth Employment and Opportunities Project. 
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