Tourism Cabinet Secretary Najib Balala at a past event. [Photo/ businessdailyafrica.com]
Tourism Cabinet Secretary Najib Balala has asked government to write off Kenya Utalii College’s (KUC) Sh2.5 billion debt.
Balala said the State institution that is currently indebted to the tune of Sh3 billion is facing financial difficulties.Of that liability, Sh2.5 billion accrued from interest and penalties on a Sh140 million loan the college received from the government 21 years ago.The money was spent in refurbishing the hotel along Thika road between 1996 and 2000.Balala said the institution had by December 2016 repaid Sh13 million whereas the loan along with interest and penalties had accumulated to Sh2.5 billion.“I request the government to waive the interest and penalties accrued on the loan in an effort to improve the college’s working capital,” the CS said.He said the KUC plays an important role in tourism because many of its graduates work in the hospitality sector.“Efforts must be made to save the college from the financial woes for the sake of students who will be leaders tomorrow in the industry,” he said.During the 2015/2016 Financial Year, Utalii College had total revenues of Sh711 million, with Sh168 million coming from its own sources, Sh260 million emanating from government transfers and Sh283 million from the Tourism Fund.Balala said KUC was unable to service the Sh140 million loan and the interest and penalties accrued due to declining finances.“The hotel, whose revenues were meant to repay the loan, is a training laboratory for the college. Its profitability is highly compromised by capacity and high operational costs due to its orientation as a training unit,” Balala said calling on the Tourism Fund to increase its allocation to the college so that it meets its operational expenses.He, however, said the financial crisis has not affected training at the institution.