Kenya has finally deposited close to Sh2.48 billion to a Belgium bank over a botched fertiliser plant deal, Treasury has confirmed.
Valued at Sh6 billion, Kenya entered into an agreement with a foreign company on the 70s to help it come up with the fertilizer plant, reports Business Daily.
A report from a parliamentary watchdog indicates that the latest payment pushed the total amount of money lost over the botched Ken-Ren Chemical and Fertiliser plant to Sh6.33 billion.
Kenya had earlier paid Sh3.9 billion to the governments of Australia and Belgium because it had guaranteed the construction of the failed fertilizer plant at Changamwe, Mombasa.
“The Government of Kenya has paid a payment of Euro 21.2 million (Sh2.48 billion) towards settlement of government guaranteed debts incurred in 1970 on account of Ken-Ren Chemical and Fertiliser Company,” the Public Accounts Committee (PAC) says in its latest report on government finances as quoted by Business Daily.
The country was keen to start a plant that would enable it to reduce the cost of production and probably reduce imports of fertilizer to the country.
The Treasury argues that Kenya paid the billions of shillings to avoid a negative credit rating that could injure its reputation and lock it out of international debt markets.
“Even though the full amount of the debt is now settled, the committee is deeply concerned that government spent such colossal sums of money on a project which did not take off and against which no value for money was achieved,” Opiyo Wandayi, who chairs PAC, said in the audit report.
This is not the first time the government is paying for incomplete projects. The construction of Sh22 billion Itare Dam has raised questions after it emerged that money was paid for work not done.
At Kimwarer in Elgeyo Marakwet, President Uhuru Kenyatta was forced to suspend construction of Sh21 billion dam after billions had been released to the contractor.
Kenya had been taken to the International Chamber of commerce court, forcing her to pay for the non-existent fertilizer plant having entered an agreement.