Treasury Cabinet Secretary John Mbadi faced intense scrutiny from senators on Thursday over the National Treasury’s move to suspend transfers to Meru County despite the county already paying Sh200 million toward settling a debt linked to French investor Rico Rock Limited.
Appearing before the Senate Standing Committee on Finance and Budget, Mbadi was also questioned over delays in completing county headquarters projects in Isiolo, Lamu, Tana River, Tharaka Nithi and Nyandarua counties.
Lawmakers demanded timelines for the stalled projects, some of which have dragged on for years.
Mbadi told the committee that the government had allocated Sh440.9 million in the current financial year to support completion of the projects and assured senators that the funds would be released before the close of the budget cycle.
“I commit that we will pay it before the end of June. I’ll actually try to disburse it before the end of this month, so that the money is absorbed in time,” Mbadi said.
Issa Timamy expressed frustration over the delays, telling senators that the Lamu county headquarters project had remained incomplete for years despite changes in leadership.
“I served as governor, left office and later returned, only to find the county headquarters project still unfinished,” Timamy said.
The hearing later shifted focus to the Treasury’s request seeking suspension of Meru County allocations under Article 225 of the Constitution following an arbitral award involving Rico Rock Limited.
Senators questioned why the Treasury opted to invoke Article 225, which allows for the suspension of county funds, instead of Article 190, which permits the national government to intervene and support counties facing challenges.
Eddy Oketch pressed Mbadi for clarification on the decision.
“What was the decision point from the Ministry to go to the extreme end of picking Article 225 of the Constitution instead of Article 190 when that was your intention?” Oketch asked.
Mbadi admitted that circumstances had since changed after President William Ruto, acting as chairperson of the Summit, committed the national government to settle the remaining Sh130.9 million principal debt.
“Had it been communicated to me formally, I would probably not have taken the step that I took,” Mbadi told the committee.
The Treasury CS explained that the dispute had evolved into a diplomatic issue that risked straining relations between Kenya and France because of the unpaid debt involving the French investor.
According to Mbadi, he is now awaiting formal communication from the Head of Public Service before notifying the Controller of Budget to withdraw the request seeking suspension of Meru County funds.
Boni Khalwale criticised the Treasury’s move, arguing that Meru County had already demonstrated goodwill by paying Sh200 million toward the settlement.
The committee directed the Treasury to submit a detailed written report explaining the rationale behind invoking Article 225, the handling of the debt and the government’s engagement with France.
Vice Chairperson Tabitha Mutinda said senators expect formal communication to reach the Controller of Budget by next week as the Senate retains the final authority on whether county allocations can be suspended.