A project launched by Gov Obado, suppliers and contractors are demanding pay

PRESS RELEASE ON CONTRACTORS’ PAYMENTS: NOVEMBER 17, 2016
Good evening everyone. We appreciate your heeding our invitation to this briefing to clear the air about some matters regarding payments to our contractors recently published in a section of the press.
According to one of the reports, a grouping of contractors has filed a petition with the Migori County Assembly and National Senate to compel the County Government to pay them their dues that have allegedly accrued for the last three years. The said contractors want the Migori County Government stopped from starting new projects until the alleged old debts are settled fully.

It is true some contractors have not been paid. It is also true that several contractors have been paid their dues fully. There are also several contractors that have been paid partially in accordance with their claims for payment.

When this county government established in 2013, optimism pervaded the air, confidence was high and expectation of the people of Migori. There was a strong and genuine desire of the government – Executive and Assembly to deliver; there were demands for classrooms, dispensaries, roads, health and administrative services, and most of our people believed it could be done.

It was this desire to meet our people’s expectations, our desire not to let them down, that guided the Assembly to budget for Ksh750mn as local revenue while we expected another Ksh500mn as additional revenue from the National Treasury as Conditional Grant.

Local revenue collection at Ksh250mn was unfortunately way below the target while the Conditional Grant was not disbursed. It still hasn’t been.

That left the County Government with a Budget deficit of Ksh1bn.

This occurred after the County Government had committed itself to several projects during the first year of 2013/2014 and continued to initiate more in the ensuing Financial Year. The hole could not be plugged with borrowing – as happens with the National Government – since that had not been authorized by the National Treasury. The County Government could also not raise the money from local sources because the target was high (Ksh500m) and we felt that our people were already subjected to several taxes and adding more would be oppressive.

All these monies had been factored in the County Budget and provided the basis upon which the contractors were engaged. That is where the rain started beating us.

In order to manage the debt while not affecting service delivery, the county government stopped initiating new projects with a view to paying the old debts first, including payments to all the contractors and suppliers, which is already ongoing.

Generally, it should be noted that some contractors have not been paid due reasons other than inadequate revenue. These include but are not limited to:

• Where contractors have not met certain conditions for the county government to pay. For example, some contractors have abandoned sites while others have done sub-standard works that have not been approved by the Works Department and are therefore required to do repeat jobs.

• Some contractors are demanding payments for the works procured by the defunct local authorities. Some of such contractors have, unfortunately, not provided the relevant and up-to-date documents indicating contract terms and how much is owed and paying them without these papers could amount to misappropriation. This is the case with contractors that built Ntimaru, Mabera and Kegonga markets.

• A number of contractors have been pushing the county government to make pre-payment; paying a contractor before starting the work. However, this according to the law, that is the Public Procurement and Disposal Act of 2005, under which most of the contracts were signed, and the revised Public Procurement and Dispensations Act, 2015, is disallowed. Contractors are paid in accordance with work done or services delivered.
It is the reason why the county government pays certain contractors in ‘piecemeal’, depending on what they have done on the ground and claimed payment for. Government does not pay before delivery.

• Some contractors were awarded tenders to do the works, but unfortunately didn’t have capacity. This has led to many projects stalling, such as the construction of ECD classrooms. To correct this, the county government plans to terminate these contracts and channel money directly to school heads to complete the constructions of the classrooms across the county.

• As part of efforts to address the concerns of the contractors and other suppliers, Governor Okoth Obado had a meeting with all contractors where issues such as availing the missing documents to fast-track payments were discussed; but this has not been implemented as agreed; some contractors still do not have all the required documents. This makes it difficult for the county government to make payments.

• We are also conscious that this being the season of politics, the demonstrations against the county government over allegedly delayed payments may be maliciously driven and probably intended to cause disaffection with the County Government.

• Finally, contractual cases are treated individually, each on its own merits and collectivisation of the alleged non-payment is therefore unrealistic. I appeal to the contractors whose documents are still missing to ensure they provide them so that payments are processed as fast as possible. Those who have met the conditions, paramount among which is delivery, need not worry as they will be paid.

Thank you all,
God bless you

NICHOLAS ANYUOR,
DIRECTOR GOVERNOR’S PRESS SERVICE,
MIGORI COUNTY GOVERNMENT
November 17th, 2016