Watchdog warns over lack of full boards for some parastatals
The Public Investment Committee (PIC) is alarmed at the high number of State corporations that are operating without fully constituted boards. Some are barely meeting the threshold to hold a meeting.
The parliamentary committee has expressed concerns that failure by the Executive to fully constitute the boards has granted the management of some of the parastatals the leeway to undertake mega projects that require approval without the consent of the boards.
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And now, PIC Chairman Mvita MP Abdulswamad Nassir has directed the Inspectorate of State Corporations to furnish the committee with details of the current composition of boards for all parastatals by next week.
This is before the committee writes to the Executive to demand that the positions be filled urgently to avert possible losses of funds.
The committee, which oversights investments undertaken by the corporations to ensure that Kenyans get value for their money pumped in the parastatals, said their recent public scrutiny of the affairs of the corporations painted a picture of bodies where unilateral decisions are made by the management without the approvals by boards.
The law requires the President to appoint board chairmen of the State corporations while the line Cabinet Secretaries appoint other members.
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But with President Uhuru Kenyatta still reconstituting his government, some of the boards do not have enough members.
“We want the Inspector of State Corporations to give us details of how the boards are constituted. So far the information we have received is worrying because some have been operating without either the chairmen, or without quorum for months,” Abdulswamad said.
“The management of these corporations are having a field day executing projects, some that require billions of shillings and since the boards are not properly in place or lack the chairman, they make dubious payments that are making Kenyans lose billions.”
The MP said it was their duty as the watchdog team to pressurise the Executive to ensure there are functional boards.
This week, Central Organisation of Trade Union (COTU) Secretary General Francis Atwoli revealed that the NSSF management paid in excess of Sh2.5 billion to a Chinese company for the controversial Hazina Trade Centre without approval by the board.
NSSF admitted when they appeared before the Abdulswamad-led committee that their board was not fully constituted and has been operating for some months without the chairman.
When the Kenya Airports Authority (KAA) management appeared before PIC, they also said that the President had never appointed a chairman since the term of former chairman General (Rtd) Julius Karangi ended last year.
Also in the same situation is the National Hospital Insurance Fund (NHIF) which, for some months has not had a chairman.
“These are just but samples of how badly our State corporations are run. Some of them are undertaking major projects and making decisions without the approval of boards,” said Abdulswamad.
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Kiminini MP Dr Chris Wamalwa warned that the decisions made by the management of the corporations without the involvement of the boards could be costly.
“A board decision can only be binding when it is fully constituted. If there is no chairman, then their decisions are open to legal challenges. This is what we want to cure,” said the National Assembly Minority Deputy Whip, who also sits in PIC.