Court freezes Sh10 billion road maintenance fund after governors sue
Construction works by Kenya Rural Roads Authority.
The High Court has frozen Sh10.5 billion collected under the Roads Maintenance Levy Fund pending the determination of a case filed by the Council of Governors challenging the use of the money by the Kenya Roads Board to build roads in counties.
At the same time, Justice Lawrence Mugambi has also suspended the National Assembly's August 13, 2024 decision not to recognise and/or to remove county governments as beneficiaries of Sh10,522,211,853 from the Roads Maintenance Levy Fund (RMLF) in the financial year 2024/2025. The levy is collected as a tax from fuel consumers.
Certifying the case as urgent, Justice Mugambi directed CoG to serve the respondents, including KRB, with the suit papers before September 18, 2024 when the case will come up for mention.
In the case filed by CoG and four other petitioners, they are seeking an order restraining KRB from disbursing the Sh10.5 billion it received from the road fund to the Kenya Urban Roads Authority (KURA) and Kenya Rural Roads Authority (KRRA).
The money, Justice Mugambi heard, was meant for the maintenance of roads in all counties.
In granting the interim relief, Justice Mugambi found that the petitioners had a strong case with a high likelihood of success.
“Upon preliminary assessment of the factual, legal and constitutional issues raised in the petition, I am satisfied they demonstratively meet the threshold that warrants an immediate intervention of this court by way of an interim conservatory order,” the judge said.
The CoG and the four petitioners are challenging the National Assembly's decision of September 29, 2023 to remove the 47 county governments as beneficiaries of the RMLF, followed by another decision on August 13, 2024 to remove the Sh10,522,211,353.10 conditional grant "from funds derived from the RMLF in the financial year 2024/2025".
The petitioners told the judge that the Fourth Schedule of the Constitution, Section 18 (b) and (c), provides for two classifications of roads -- trunk roads and county roads.
Justice Mugambi said Articles 186 and 187 require county governments to maintain county roads.
He said from the evidence adduced before the court, the petitioners had challenged the constitutionality of the National Assembly's decisions to deny county governments funds collected from taxes for the purpose of maintaining roads, yet "county roads fall under their jurisdiction".
The judge noted that the CoG is challenging the application of the Kenya Roads Act of 2007, which they say is not in line with the Constitution as it lacks the constitutional framework that "supports the constitutional classification of roads".
The judge was urged to intervene as roads throughout the county are in a deplorable state and require urgent attention.
Pending the hearing and determination of the case, the judge was urged to grant a conservatory order freezing the Sh10 billion in the KRB account, collected from the RMLF.
The petitioners also sought a conservatory order restraining the KRB from disbursing to any third party any funds received from the RMLF.
CoG and other petitioners – Issa Karani, Patrick Karani Ekirapa, Paul Ngweywo Kirui and the International Legal Consultancy Group Ltd – are asking the court to determine whether Parliament's decision is in line with the Devolution Act as contained in the 2010 Constitution.
The petitioners, who have named the National Assembly, KRB, CS Treasury and Economic Planning, National Treasury & Economic Planning, CS Roads & Transport, Kenya Urban Roads Authority (KURA) and the Attorney General as respondents, claim that Parliament's decision is discriminatory.
The CoG and co-petitioners have also named the Commission of Revenue Allocation (CRA), the Senate of Kenya and the Technical Committee on Inter-Governmental Relations as interested parties.
“The application for conservatory orders is very urgent and should be heard during the current High Court Vacations. Any time now, KRB is expected to disburse funds from RMLF for the financial year 2024/2-25 that commenced July 1, 2024. If the conservatory orders sought will not be issued urgently to stop disbursements, the entire petition will be rendered moot,” the petitioners urged.
On February 11, 2023, at a meeting in Naivasha, the National & County Governments Coordination Summit, attended by President William Ruto and the 47 governors, resolved that County Governments should receive funds from the RMLF for the 2024/2025 financial year -- as conditional grants.
But on September 28, 2023, the National Assembly, citing Section 6 of the draconian Kenya Roads Board Act 1999, unilaterally decided to remove county governments as beneficiaries.
The petitioners claim that the National Assembly made the decision without public participation.
The petitioners filed a lawsuit on November 16, 2023. An injunction was issued preventing the road authorities from receiving the funds, and in January 2024 the National Assembly approached the petitioners for an out-of-court settlement.
The case was withdrawn from court at the request of Parliament on the understanding that the counties would receive the conditional grant of Sh10.5 billion.
Following Parliament's decision on August 13, 2024 to exclude counties from the conditional grant, the petitioners feel short-changed.
