Six regional development authorities could soon be disbanded as Parliament considers a new law that would transfer their assets, liabilities and staff to the national and county governments.
The move is part of a wider effort to reshape State institutions in line with devolution, with MPs seeking to transfer the authorities’ functions to county governments and reduce duplication between the two levels of government.
The six regional development authorities have agreed to hand over their assets, liabilities and personnel if Parliament approves the proposed legislation.
The Acts establishing the authorities targeted for repeal include those governing the Kerio Valley Development Authority, Tana and Athi Rivers Development Authority (Tarda), Lake Basin Development Authority, Ewaso Ng'iro North Rivers Basin Development Authority and Coast Development Authority.
The proposed law seeks to bring the functions of the institutions in line with the Fourth Schedule of the Constitution, which sets out the responsibilities of the national and county governments.
It also seeks to reduce competition for government funding while improving efficiency, accountability and service delivery.
However, the planned dissolution has raised concerns over the financial obligations owed by the authorities, particularly unpaid salaries and statutory deductions.
Tarda managing director Liban Duba told MPs that the authority has salary arrears running into millions of shillings, leaving employees struggling with loans and other financial obligations.
"Tarda has outstanding salary arrears amounting to Sh176,944,578 for the period January 1 to June 30, 2026. The non-payment has resulted in staff defaulting on bank and Sacco loans and statutory obligations, including Social Health Insurance Authority, Housing Levy, pay as you earn and National Social Security Fund, exposing them to penalties, interest, adverse credit listings and loss of benefits," Liban Duba, Tarda managing director told MPs.
Duba called for the outstanding payments to be dealt with before the authority is dissolved or during the transition period.
"We respectfully submit that the Bill should expressly provide for the full settlement of outstanding salaries and statutory deductions before or as part of the dissolution and transition process."
He said Tarda supports the government’s plan to bring public institutions into line with the Constitution and ensure public resources are used efficiently.
"We respectfully submit that the Bill should expressly provide for the full settlement of outstanding salaries and statutory deductions before or as part of the dissolution and transition process."
Duba said the authority was seeking safeguards for its employees as well as a clear process for transferring its functions, assets and liabilities.
He said the transition should also provide for the settlement of all outstanding financial and statutory obligations linked to the proposed dissolution.
The planned changes are part of a wider government review of State corporations.
Last year, the Cabinet endorsed a decision requiring the National Treasury to assess 271 State corporations, excluding those already earmarked for privatisation, to identify areas of inefficiency and possible redundancy.
The review found that many State corporations were struggling to meet their statutory obligations. Their difficulties had contributed to pending bills amounting to Sh94.4 billion as of March 31, 2024.
The wider restructuring plan proposes the dissolution or merger of 42 State corporations.
Among the institutions targeted is the University Fund, which is expected to be merged with the Higher Education Loans Board.
The Kenya Rural Roads Authority is also set to be consolidated with the Kenya Urban Roads Authority.
Other proposed mergers include the Kenya Tourism Board with the Tourism Research Institute and the Export Processing Zones Authority with the Special Economic Zones Authority.
The Anti-Counterfeit Authority is proposed for merger with the Kenya Industrial Property Institute and the Kenya Copyright Board.
The Kenya Industrial Research and Development Institute is also set to be merged with Kenya Industrial Estates, while the Agricultural Finance Corporation is proposed for consolidation with the Commodities Fund.
The Kenya Forest Service and Kenya Water Towers Agency are proposed to be merged with the Agricultural Development Corporation and the Kenya Animal Genetic Resource Centre.
The National Irrigation Authority is also listed for consolidation with the National Water Harvesting and Storage Authority.
The Kenya Law Reform Commission is similarly proposed for merger with the National Council for Law Reporting.
The planned changes point to a wider effort to reduce the number of State agencies, remove overlapping roles and ensure public institutions operate within the responsibilities assigned to the national and county governments.