Senate to grill Treasury officials over KQ bailout

July 21, 2015
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Nyeri Senator Mutahi Kagwe the vice chairman of the committee said although the action by the government was on goodwill, the committee wanted to know the basis of the agreement/FILE
Nyeri Senator Mutahi Kagwe the vice chairman of the committee said although the action by the government was on goodwill, the committee wanted to know the basis of the agreement/FILE
NAIROBI, Kenya, Jul 21 – The Senate intends to summon officials from the National Treasury and the Transport and Infrastructure Ministry to furnish them with information over the bailout plan for national carrier Kenya Airways.

During the first day of public hearing by the Senate committee inquiring into the affairs of the airline which received public apathy, the committee raised questions over why the government took such a long time to respond to the crisis and how it intended to mitigate it.

Nyeri Senator Mutahi Kagwe the vice chairman of the committee said although the action by the government was on goodwill, the committee wanted to know the basis of the agreement and whether it meant the shares of the government which currently stand at 29 percent were increased and whether the bailout monies were a loan.

“This capital we have put in, is it ordinary shares that we have bought, are the other shareholders going to asked to inject the same capital on pro rata basis so that they retain the same shareholding or have we increased our shareholding as a result of it. Further what are we holding as security,” posed Kagwe.

He explained that although it was not unusual in business to have ups and downs, whether privately owned or government owned it was important to address the Kenya Airways issue as initially it was fully government owned before the government sold its shares.

“I am a believer that governments don’t make very good business. But in this case, the question is did the partners which Kenya Airways got at that time help the company in the manner in which it was professed, or is it that the global airline business environment has changed so much any way that there is need for an evaluation?” posed Kagwe.

Siaya senator James Orengo supported Kagwe’s sentiments saying the committee would be looking at the government intervention with regard to purchase of shares and whether it affected the company in any way.

The senators concurred that the Kenya Airways woes needed urgent redress as the national carrier was the identity of the country and was a crucial ingredient in the growth and prosperity of the country.

The committee will also be looking at the general terms and conditions given to the airline by the government in its bailout.

The committee’s chairman Kisumu Senator Anyang’ Nyong’o noted that fear had gripped not only the shareholders but users and that there was need to restore public confidence in the airline.

He said the main company needed support so that it does not lose to the subsidiaries like Jambo Jet which has been seen to be performing quite well.

The public hearing continues on Wednesday.

Senators Omar Hassan (Mombasa), Daniel Karaba (Kirinyaga), Peter Mositet (Kajiado), Boni Khalwale (Kakamega) and Agnes Zani (Nominated) among others were in attendance.

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