Debts linked to the Anglo Leasing type of contracts swelled by 3.6 per cent to Kes17.5 billion at the end of last year even as payments were suspended pending investigations and litigation.
The Treasury has published the debt owed to the firms linked to the Anglo Leasing scandal that were contracted in 2002 and 2003 during President Mwai Kibaki’s regime.
The debts are owed to five entities including LBA Systems, Sound Day Corporation, Apex Finance, Ciara Systems and Midland Finance for security contracts.
The Treasury, however, did not disclose whether the dollar and euro denominated loans increased because of currency valuations or inclusion of interest charges.
The debts include Kes2 billion owed to LBA Systems for the national early warning system for meteorology department charging five per cent interest, repayable in 13 quarterly instalments.
Sound Day Corporation is owed Kes1 billion for providing Kenya Police with equipment charging 6 per cent on the dollar loan.
Apex Finance was supposed to be paid Kes522 million between 2002 and 2005 for Police Airwing support and had charged the country three per cent interest.
Ciara Systems is owed Kes4.4 billion for project Flagstaff at unspecified interest rate while LBA Systems had charged 5 per cent for its Kes3.4 billion loan for Kenya Prison.
Midland Finance charged Kenya 5 per cent on a Kes5.9 billion loan for Administration Police Telecommunication Equipment.
“The above listed security related contracts remain suspended pending completion of investigations / litigations,” the Treasury noted in the debt register.
Kenya has paid off billions of shillings to some of the contractors tied to the Anglo Leasing controversy, which involved state contracts worth Kes70 billion awarded to ghost firms.
In 2014, the Treasury struck a negotiated settlement of the long-running legal dispute with one of the 13 Anglo Leasing companies, clearing the main hurdle that had delayed plans to raise the first Eurobond.
Over the years, only the late former Finance Minister David Mwiraria, Permanent Secretaries Joseph Magari, Dave Mwangi and David Onyonka and three businessmen Chamanlal Kamani, Deepak Kamani, Rashmi Kamani have been charged with conspiracy to defraud the government.
Between 1998 and 2003, the various suppliers and financiers were contracted for priority State projects to enhance communication and operational capacities.
To circumvent stringent procurement and audit procedures, however, the projects were fashioned as “security projects” so as to justify direct sourcing from identified “suppliers” and “financers”.
The exemption from procurement regulations granted in the procurement of the alleged “security equipment” appears to have been abused.