Treasury Boss Rejects Uasin Gishu KSh500 Million Loan for Roads;says it is Illegal

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[Photo File: Governor Mandago,Members of County assembly and County Executive at a past event]

Treasury Cabinet Secretary Henry Rotich has rejected plans by Uasin Gishu county government to borrow Ksh500 million loan from Kenya Commercial bank to purchase roads construction equipment.

Speaking to journalists in Eldoret town on Monday, Rotich said the move was illegal and his office would not approve the loan.

The deal to borrow the loan from Kenya Commercial Bank has already been approved by the Uasin Gishu county assembly despite opposition from some members who said the plan was unnecessary and would overburden the taxpayers.

Uasin Gishu County assembly Speaker Isaac Terer was among those who advised the county government against the move saying any borrowing by the county had to be approved by the national government and should not exceed five per cent of the last audited accounts of the assembly.

Commission on Revenue Allocation Chairman Micah Cheserem had also told counties not to borrow within the first three years but MCAs and the county executive ignored the advisory.

The deal by the county government would have guaranteed MCAs to acquire Sh5 million loan each payable with a 3 per cent interest.The MCAs approved the Sh500 million loan to the county after having been awarded their personal loans. About Ksh140 million interest will accrue on the Ksh500 million, as the money will attract an annual interest of 7.8 per cent for three years.

Uasin Gishu County Governor Jackson Mandago has however come out to strongly defend the deal saying the county needs its own equipment to maintain roads in the county.He said the rates at which they would get the loan from the bank were very reasonable.

Governor Mandago said the county government did not have enough money to buy the machines. He added that the county had to invest for the roads saying the only way the county will develop is by having good roads.

He lamented that the county was using millions of shillings to repair old graders and it was time to acquire new ones.

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