“More than 30 years ago, MWAI KIBAKI was Minister for Finance, he committed the Government, and the people of Kenya to the construction of a Ken Ren Chemical and Fertiliser Company in the Coast Province. Why is the Kibaki Government committing Kenyans to pay Kenya shillings 4.3 Billion from the consolidated fund for a project that never was?” RAILA ODINGA, November 5th 2007
Resolving the 30-year old Ken Ren Fertiliser Factory Scandal is a political hot potato.
When Raila Odinga called a press conference on November 5th 2007 to accuse his then opponent Mwai Kibaki of corruptly authorizing payments for the non-existent fertilizer could he have imagined that the two would once again sit in the same government? At that time it would have been a stretch of imagination to predict that as Prime Minister Raila Odinga would be collectively responsible in a government that would continue to make payments for the phantom factory. And yet, that is the very situation he now finds himself in.
The handling of Ken Ren is a study in political compromise and irony. Kenyan politics is such that within less than a year Mr. Odinga has found himself at the heart of a government that continues to commit ever more badly needed funds to a project he loudly condemned as fictitious and corrupt.
The National Budget for this year includes payments to the tune of hundreds of millions of shillings to Austrian and Belgian banks for the Ken Ren fertilizer factory that was never built; even as Kenyan farmers have to be bailed out with subsidized fertilizer by the Government to the tune of billions of shillings.
The transcripts of the Raila Odinga’s November 2007 press conference and the furious responses it elicited from the government demonstrate that Ken Ren is a hot political potato. Most of the claims made by several Government ministers can easily be described as misleading – for example it is clear that the Finance Ministry was less than candid in claiming that there was no provision for Ken Ren Fertiliser Factory payments in the budget for 2007.
The challenge to Mr. Odinga’s anti-corruption credentials that Ken Ren poses is obvious. Some may surmise that in struggling to keep the fractious Grand Coalition together he is sacrificing principle at the altar of political expediency. But in doing so, he exposes himself to charges that a year ago might not have been brought against him, such as condonation of what he condemned.
The facts about the infamous Ken Ren Fertiliser factory are well known in Kenya. Three decades ago the country was scammed by a foreign investor, and three decades later Kenyans are still paying the price of inaction against grand corruption and abuse of office. There is no fertilizer factory and Treasury should not be making annual payments to European banks, especially at this time of economic hardship. If ever there was a prime candidate for a declaration of odious debt, it is the Ken Ren Fertiliser Factory.
We are uploading the transcripts of Raila Odinga’s November press conference on the Ken Ren Fertiliser Factory to remind the Government, and the Prime Minister in particular, of their obligation to give Kenyans a straight answer about this project and the dubious payments annually made to two European banks – BAWAG of Austria and Ducroire of Belgium. This is the least expected of Raila Odinga.
5th NOVEMBER 2007
1. Citizen Television (CTV) 5th November 2007 - 21.00 News
CTV ANCHOR: ODM Presidential candidate Raila Odinga has made fresh allegations of corruption within the Government. The Langata Member of Parliament is claiming that the Government has authorized payment of 4.3 Billion shillings towards the Ken Ren Fertiliser Company project that failed to take off 30 years ago. But Finance Minister Amos Kimunya dismissed the claims as mere politicking and challenged Raila to give evidence.
CTV REPORTER: Raila made the claims shortly after meeting with ODM Parliamentary aspirants from across the country at the Bomas of Kenya in Nairobi. Raila who was accompanied by ODM Pentagon members claimed that the Government has authorized part of payment of 4.3 Billion shillings for the project whose principal worth was 268 Million shillings in the mid 1970’s
RAILA ODINGA: Why is the Kibaki Government committing Kenyans to pay Kenya shillings 4.3 Billion from the consolidated fund for a project that never was? Two, is this not another way of Stealing Public money to bank roll the Kibaki re –election bid?
CTV REPORTER: The former Langata MP claims that the payment was one of the schemes by Treasury to pay for non existent projects
RAILA ODINGA: It is emerging that this Ken Ren Scandal is part of an elaborate scheme to siphon huge amounts of money from the Consolidated Fund through the Central Bank and the National Security Intelligence Service on instructions from State House. It is clear that the Ken Ren Scandal is one of many questionable schemes hatched by Treasury to pay for non existent projects
CTV REPORTER: But, the Government moved fast to dismiss the allegations
AMOS KIMUNYA: And its very unfortunate that a Presidential candidate should be going around the country eh..eh spreading rumours either on ECK or the stock exchange and when they exhausted that, they now start talking about non existent payments being made. So I think I would be happy to hear from him or to seek from him what evidence he has that me as Minister for Finance, I don’t have.
CTV REPORTER: The Minister challenged Raila to table his evidence regarding the payment.
AMOS KIMUNYA: If it is contained in the Financial Statement then, he should be showing the specific line where it is contained. You know its him who is alleging, let the one who alleging prove not try and force things that were not there. And in any case he was in Parliament when the matter was discussed and I don’t remember him either introducing it because we have not introduced it or questioning where it was.
PETER KENNETH: It is important for the public to note that the Government proposes its Estimates of expenditure to Parliament, and further that Parliament is the institution that has full Authority and approves the Estimates through the Appropriations Act.
2. Kenya Television Network (KTN) 5th November 2007 - 21.00 News
KTN ANCHOR: As earlier mentioned ODM Presidential candidate Raila Odinga has accused President Mwai Kibaki of presiding over graft by ordering the payment of 4.3 Billion shillings from the Consolidated Fund to a non existent project commissioned over 30 years ago and one that never took off.
KTN ANCHOR: But the Government called a News Conference this evening AND dismissed the allegations as a bunch of lies. Raila has in the meantime promised Public Service jobs to losers of ODM nominations. He told the parliamentary Aspirants that the nominations will be free and fair.
KTN REPORTER: When Raila walked into Bomas of Kenya today, it was for a meeting with aspirants, but he called a press conference at which he accused the President of engaging in graft to fund his re election campaign. He said the Government was paying 4.3 Billion shillings from the Consolidate fund to a project that was non existent.
RAILA ODINGA: More than 30 years ago, Mwai Kibaki was Minister for Finance, he committed the Government, and the people of Kenya to the construction of a Ken Ren Chemical and Fertiliser Company in the Coast Province. Why is the Kibaki Government committing Kenyans to pay Kenya shillings 4.3 Billion from the consolidated fund for a project that never was?
KTN REPORTER: However, the Government was swift to counter the allegations. Finance Assistant Minister, Peter Kenneth accompanied by Permanent Secretary Joseph Kinyua and Investment Secretary Esther Koimett, quickly disputing the allegations
PETER KENNETH: We have no provisions whatsoever for Ken Ren, we have no provision of that amount for any other item whatsoever. And we are saying the Printed estimates are there anybody can look at them.
3. Nation Television (NTV) 5th November 2007 - 21.00 News
NTV ANCHOR: ODM Presidential Candidate Raila Odinga is putting President Kibaki and his Government on the spot over a 30 years old scandal that he says continues to the cost tax payer. Raila claims the Government is still paying out billions of shillings to a phantom company for a project that failed in the late 70s. The Government has however denied using any money from the Ken Ren project of the 1970s. NTV’s Robert Nagila brings us that story
NTV REPORTER: it was just a matter of time before the gloves came off. And, this morning a remark from an unlikely source brought to the fore the beginning of the dirty campaigns. This morning, Noah Wekesa the minister for Science and technology, triggered off a ripple effect that would be having far reaching consequences by days’ end.
NOAH WEKESA:(translated from Kiswahili) we can see he is a man with a lot of money and the way we know honourable Raila, he is not someone who runs big businesses or has donor outside who are supplying him with money and vehicles of which some of them we cannot afford, while he has vehicles and choppers.
NTV REPORTER: The personal attack of the ODM presidential candidate did not go down well triggering an immediate response over a scandal that had largely been forgotten.
RAILA ODINGA: President Kibaki has authorised payment of Kenya shillings 4.3 Billion from the consolidated fund for a project whose principle worth was only Kenya Shillings 268 million.
NTV REPORTER: That statement set alarm bells ringing and by early evening Treasury called for a press conference slated for 7pm. Flanked by all the top Officials, Peter Kenneth, the assistant minister for Finance answered Raila’s allegations.
PETER KENNETH: treasury would like to categorically state that Hon. Odinga’s statement is not factually correct. The correct position is as follows:-
- Government has no plans to establish or revive the Ken Ren project.
NTV REPORTER: But Raila claims that he has the evidence, he refers to these two provisions made in this years budget to pay two companies apparently in relation to the Ken Ren Chemicals factory saga but the finance ministry has denied it.
RAILA ODINGA: the part payment of the 4.3 billion shillings is contained in the printed estimates of the financial year 2007/2008.
PETER KENNETH: We have no provisions whatsoever for Ken Ren, we have no provision of that amount for any other item whatsoever. And we are saying the Printed estimates are there anybody can look at them.
NTV REPORTER: Tonight, Treasury are saying they are willing and ready to table the estimates to prove no such payment was factored into the Government budget. The public will be keenly watching this developing story to find out just who is telling the truth. Robert Nagila NTV tonight
4. Kenya Broadcasting Corporation (KBC) 5th November 2007 - 21.00 News
KBC ANCHOR: The Government has dismissed as false allegations by ODM Presidential aspirant Raila Odinga purporting that it has authorised payment of 4.3 billion shillings from the consolidated fund of this financial year for a project where its principle was worth 268 million shillings. Assistant finance minister Peter Kenneth says the Government has no plans to establish or receive or revive the Ken Ren project.
RAILA ODINGA: the Government has authorised the payment of 4.3 billion Kenya Shillings from the Consolidated Fund for a project whose principal worth was only Kenya Shillings 268 million at its conception in the late 1970s. the part payment of the 4.3 billion shillings is contained in the printed estimates of the financial year 2007/2008.
PETER KENNETH: it is important for the public to know that the government proposes its estimates of expenditure to parliament and further that the parliament is an institution that has full authority and approves the estimates through their appropriation act. It is therefore insincere and unfortunate for honourable Odinga who is aspiring to the highest office in the land to make unsubstantiated statements and purport them to be the truth.
6th NOVEMBER 2007
1. Nation Television (NTV) 6th November 2007 - 21.00 News
NTV ANCHOR: Bawag Austria a company associated with the Ken Ren scandal is featured in the list of Government debtors despite denial by the treasury, the revelation further complicates the mystery surrounding the chemical’s factory that collapsed thirty years ago. ODM’s Raila Odinga maintains that the Government intends to pay up to 4.3 billion Kenya Shillings for the deal. NTV’s Richard Chacha reports.
NTV REPORTER: The Ken Ren scam dates back to 1970 when Kenya Government entered into a joint venture with an American company to set up a fertilizer-processing plant in Mombasa. Ken Ren chemical and Fertilizer Company was born, the Government of Kenya was both a shareholder and a guarantor in the factory. The deal collapsed and the factory was not built after all ,then it was embroiled in litigation in Europe. When the matter was referred for arbitration Bawag an Austrian company was awarded against the Kenya Government. The issue was brought into public domain by ODM pentagon member Joseph Nyagah, and now reintroduced by party presidential candidate Raila Odinga.
RAILA ODINGA: President Kibaki has authorised payment of Kenya Shillings 4.3 billion from the Consolidated fund for a project whose principal worth was only Kenya shillings 268 million at its conception in the mid 1970’s.
NTV REPORTER: But the government says that no such deal was ever factored in the printed estimates.
PETER KENNETH: The Government has no plans to establish or revive the Ken Ren Project.
MUKHISA KITUYI: I am the minister under whose portfolio Ken Ren falls, we have commissioned studies on the viability of reviving Ken Ren. We have decided it is not viable, we have abandoned it and there is absolutely no attempt to revive Ken Ren.
NTV REPORTER: But NTV has now established that Ken Ren related companies were included in a long list of debts Kenya signed between 1963 to date, as tabled in Parliament by finance assistant minister Peter Kenneth. In the printed estimates for the current financial year, part payment of 192 million shillings is listed for Bawag Austria and another 75 million Shillings under Austria. The issue has fast turned political as the Government critics strive to highlight the fact that the deal was signed when President Kibaki was the finance minister. The scandal may be older than the vast majority of us but its effects continue and will continue being felt as Kenyans now grapple to understand on who is fooling who. Richard Chacha NTV tonight
2. Kenya Television Network (KTN) 6th November 2007 - 21.00 News
KTN ANCHOR: To political matters now, where the Party of National Unity has rubbished claims by ODM presidential candidate Raila Odinga that President Kibaki had ordered the irregular payment of 4.3 billion shillings from the Consolidated Fund.
A statement from the party’s headquarters said “the only payments made with respect to Ken Ren were approved by the cabinet when Raila was in cabinet” however, Mwalimu Mati from MARS GROUP an Anti Corruption Watch Dog weighed in on the debate by asking the Government to clarify why the loans were listed in the debt Register if the Government did not intend to repay them. Muraya Kariuki has the details
KTN REPORTER: “when Raila Odinga spoke of Ken Ren yesterday, it was to accuse the President on ordering the payment of 4.3 billion shillings to a project initiated 30 years ago and which never took off.
RAILA ODINGA: “President Kibaki has authorized payment of Kenya shillings 4.3 billion from the Consolidated Fund for a project whose principal worth was only Kenya shillings 268 million at its conception in the mid 1970s.”
KTN REPORTER: Raila alleged that the funds were meant to fund the President’s campaigns, but that got a swift reply from finance assistance minister Peter Kenneth was flanked by finance PS Joseph Kinyua and investment secretary Esther Koimet.
PETER KENNETH: “an allegation has been made to the fact that the treasury intends to pay or has paid 4.3 billion on account of Ken Ren and am saying there is no such a thing”.
KTN REPORTER: according to documents attributed to the ministry of finance, in 2004 the government signed off 2.8 billion shillings for the repayment of loans, the repayment was based on agreements to honor old debts and was then included in the debt register.
Mwalimu Mati of the MARS GROUP says the problem lays in the intended payments or payments made for a contract that was never actualized.
MWALIMU MATI: “Why should tax payers be asked to contribute to repayments for something that does not exist and that even the Kombo select committee report said does not exist’.
KTN REPORTER: Mukyisa Kituyi on the other hand says Ken Ren was judged to be beyond redemption and there is no plan to revive it.
MUKHISA KITUYI: “I am the minister under which portfolio Ken Ren falls, we have commissioned studies on the viability of reviving Ken Ren we have decided its not viable we have abandoned it and there is absolutely no attempt to revive Ken Ren’.
KTN REPORTER: printed estimates for the year 2006/2007 show that the government intended to pay 14.2 million in 2006 and 192.9 million shillings in 2007 to a company known as Bawag of Austria listed as a creditor for 2.8 billion shillings in relation to Ken Ren, the question then begs, just who is telling the truth on this one, and what exactly is the nature of Government dealings as regards Ken Ren. Muraya Kariuki KTN Prime
Print Media
http://multimedia.marsgroupkenya.org/?StoryID=201810
http://multimedia.marsgroupkenya.org/?StoryID=201807
http://multimedia.marsgroupkenya.org/?StoryID=201812
http://multimedia.marsgroupkenya.org/?StoryID=201766
The facts on Ken Ren Chemical and Fertilizer Company.
Peter Kenneth (Assistant Minister for Finance) tabled a list of all loans signed by the Government of Kenya between January 1963 and December 31st 2006. On this list there are two Ken Ren related loans. Unpaid loans. Collectively, they are worth just over Ksh. 4.3 billion. Click here to see list of loans tabled in Parliament
Ken Ren debts are listed in Our External Debt Register of the Government of Kenya as monies we owe an Austrian Bank called Austria BAWAG and a Belgian Bank called Belgium Ducroire. Click here to see Kenya’s external debt register from 2002 to 2006
Ken Ren Chemical and Fertilizer Company a fertiliser processing plant at Tudor, Mombasa, on the Kenyan Coast was never built and does not exist.
The budget estimates 2007/2008 provided for a payment of at least Ksh.268m on principal and interest payments for Ken Ren, which by all accounts ended in failure 30 years ago. The payment was made from the Consolidated Fund. . Click here to see the Ken Ren provisions in 2007/2008 estimates of the Budget of Kenya
This financial year budget estimates 2008/2009 provides for a payment of at least Kshs 334,436 558 million on principal and interest payments for Ken Ren a 30 year old dud project, The payment will be made from the Consolidated Fund. Click here to see the Ken Ren provisions in the current 2008/2009 estimates of the Budget of Kenya
The mystery of Ken Ren Chemical and fertilizer company. Click here to read our Publication on Ken Ren
Kenya’s Finance Minister’s Budget speech June 12th 2008
Kenya faces a massive fertilizer importation bill even as the Minister of Finance makes payment of hundreds of millions of shillings to foreign banks for a fertilizer factory that does not exist.
Government Initiative on Fertiliser
http://www.communication.go.ke/media.asp?id=537&media_type=2
Equity Bank Fertiliser Loans
http://africanagriculture.blogspot.com/2008/04/kenyan-bank-offers-grain-farmers.html
Huge fertilizer import bill to cost farmers dearly
http://www.bdafrica.com/index.php?option=com_content&task=view&id=7807&Itemid=5813
KTDA suspends fertiliser imports as costs rise
http://www.bdafrica.com/index.php?option=com_content&task=view&id=7651&Itemid=5811
State turns down cries for subsidies
http://www.bdafrica.com/index.php?option=com_content&task=view&id=8019&Itemid=5813
Tags: 2007/2008, Bawag, budget, Budget Estimates, debt, Finance Minister, KenRen, Mwai Kibaki, Peter Keneth, Raila Odinga