Kenya Kwanza accused of breaking the law in planned hotel sale

The government risks yet another legal showdown over its latest privatisation bid.

It now emerges that the move to shed off some shares in government-owned parastatals had been stopped by the High Court and orders are still in place.

Lawyer Kevin Oriri now says that the Kenya Kwanza government is acting in defiance of court orders.

He asserts that Justice Chacha Mwita issued orders barring the state from selling its assets until a case filed in court is heard and determined.

The President William Ruto-led administration is looking to sell hotels it owns namely Mombasa Beach Hotel and Voi Safari Lodge, Ngulia Safari Lodge all operating under Kenya Safari Lodges and Hotels Limited.

Others are Golf Hotel, Sunset Hotel Limited, Mt Elgon Lodge Limited and Kabarnet Hotel Limited.

Already, the Privatisation Authority has embarked on the process of looking for an advisor to guide the hotel's sale.

Oriri in 2023 filed a case on behalf of Journalist Gitahi Ngunyi challenging the first round of sale of 11 parastatals.

Raila Odinga’s party, Orange Democratic Movement (ODM), through Jackson Awele and Katiba Institute filed separate cases and the three were consolidated.

Odinga obtained orders from Justice Chacha Mwita stopping the sale until February 6, 2024, and the orders were extended until the hearing and determination of the matter on April 12.

Oriri said that the Privatisation Act 2023, defies the doctrine of separation of powers.

“The Act undermines the oversight role of Parliament and arrogates to the Cabinet Secretary and by extension the Cabinet, arbitrary powers in a process as significant to the nation as the sale of its strategic assets,” he said.

The parastatals listed for sale are Kenyatta International Conference Centre (KICC), New Kenya Co-operative Creameries (New KCC), Kenya Pipeline Company, Kenya Literature Bureau, National Oil Corporation, Kenya Seed Company Limited, Mwea Rice Mills and Western Kenya Rice Mills Limited.

“The Privatisation Authority invites sealed proposals from interested and eligible consultants for the provision of advisory services…on the privatisation of Kenya Development Corporation controlled hotels,” read a public notice issued on Tuesday, March 12.

Dr Ruto assented to the Privatisation Bill, 2023, on October 9, which opened the way for a speedy privatisation of state-owned enterprises without involving the National Assembly.

The role of formulating the privatisation programme was given to the Treasury Cabinet Secretary, who then should seek approval from the Cabinet on the planned sale.

The National Assembly’s role is to ratify the programme, the process however requires public participation.

The assented law repealed the Privatisation Act 2005 which was enacted before the implementation of the 2010 Constitution.

“It is intended to remove the bureaucratic processes in the privatisation of non-strategic or loss-making government entities,” read a statement from State House at the time.

It was sponsored by Majority Leader and Kikuyu Member of Parliament Kimani Ichung’wah.

“The Bill will also improve the infrastructure and delivery of public services through the involvement of private capital and expertise and at the same time reduce the demand for government resources.”

The move by the state was to grow its revenue from the sale of what it called ‘non-performing’ or ‘loss-making parastatals’.

The Privatization Authority now has the mandate to handle the privatization process taking it away from the MPs.

“The Bill assigns the responsibility of formulating the privatization program to the Cabinet Secretary. Thereafter, the privatisation program shall be submitted to and approved by the Cabinet. The role of the National Assembly shall be to ratify the program.”