Treasury Cabinet Secretary Ukur Yatani will take over the financial and management control of cash-rich parastatals in July from his Transport counterpart James Macharia in what heralds a significant shift of power to the former Marsabit governor.
Mr Macharia will cede financial and management control from the start of the new financial year. Mr Yatani will now be in-charge of the lucrative Infrastructure and transport department’s billions of shillings. The transfer of funds has now elevated the Treasury to the third single biggest spending government department.
The move follows the transfer of Kenya Railways Corporation, Kenya Pipeline Corporation and Kenya Ports Authority (KPC) to the National Treasury last year.
Since the Jubilee government took over power, the Infrastructure ministry has been the centre of attention, receiving billions of shillings every year.
Mr Macharia, who is seen as the blue-eyed boy of the Uhuru administration, has been in-charge of the key Jubilee government legacy projects among them the Standard Gauge Railway, ports and superhighways.
Sh3.6 trillion budget
The development has seen National Treasury now overtake Defence, Health, Interior and Citizen services departments on the list of top spenders, after its budget grew by Sh49.6 billion to Sh167.8 billion for the new financial year starting July.
An analysis of the Sh3.6 trillion budget for the 2021/22 fiscal year shows that this is the single biggest budget increase, translating to a 42 per cent increase, up from the Sh118.1 billion in the current fiscal year.
The re-organisation started last year when President Uhuru Kenyatta formed the Kenya Transport and Logistics Network Framework, which was put under the Industrial and Commercial Development Corporation (ICDC) that reports to the National Treasury.
Mr Yatani says the re-organisation will help to establish a seamless and co-ordinated national transport and logistics network. Further, the new structure is expected to lead to the lowering of the cost of doing business in the country through the provision of port, rail and pipeline infrastructure in a cost-effective and efficient manner, and within acceptable shared benchmark standards.
“In addition, the network will allow for centralisation of operations and would not cause disruption to the legal structuring of the State entities. The three agencies have since been transferred to the National Treasury,” Treasury says.
“The National Treasury has been tasked to strengthen its internal capacity by securing the necessary technical skills and competencies needed to effectively oversee investment portfolio management, and the setting up, monitoring and reporting of the financial performance of commercial State corporations,” Treasury adds.
Due to the reforms, the proposed merger of the ICDC into the Kenya Development Bank has been postponed.
Kenya Railways and marine transport will now be directly under the National Treasury.
In the new financial year, Yatani will now expend Sh32.4 billion for rail transport and Sh20 billion for marine.
To hit the road running, Mr Yatani has already taken over the leadership of the key departments. The CS revealed last week that the government is now re-organising ports. Each port will have its own managing director since they all have specific features.
“We are at final stage and soon we shall announce how each ports will have independent management. The delay in naming the new KPA MD is as a result of the ongoing planned restructuring where we want Mombasa Port and this of Lamu will have independent management,” said the CS.