The New Kenya Co-operative Creameries (New KCC) has been urged to reconsider its supply arrangements with several government agencies that have yet to settle outstanding debts amounting to KES 184.3 million. The call was made by the Committee on Trade, Industry, and Cooperatives, which highlighted the financial strain these unpaid debts are placing on the milk processor and, by extension, on farmers.
Committee Chairperson James Gakuya stressed the importance of financial prudence, particularly in dealings with entities that have consistently failed to pay their dues. “New KCC is in business, and no one compels you to keep supplying milk to government agencies that still owe you money. You cannot tell farmers that you can’t pay them because government bodies owe you,” said Hon. Gakuya during a committee session held at Bunge Towers.
The session, which brought together key stakeholders, including Cooperatives Principal Secretary Patrick Kilemi and acting New KCC Managing Director Samuel Ichura, laid bare the extent of the problem. According to PS Kilemi, significant portions of the outstanding KES 184.3 million are owed by key government ministries and agencies. The Ministry of Defence leads the pack with an unpaid bill of KES 49.49 million, followed closely by the Administration Police Service, which owes KES 32.38 million.
State House also features prominently on the list of debtors, with an outstanding debt of KES 14.62 million. Other notable entities include Kenyatta National Hospital (KES 10.53 million) and The Presidency (KES 6.79 million). Additionally, the Kenyatta National Hospital Private Wing and Moi Teaching and Referral Hospital owe KES 4.45 million and KES 4.04 million, respectively. Even the National Security Intelligence Service and the Office of the First Lady have unpaid bills, totaling KES 4 million and KES 3.07 million, respectively. Nairobi Water and Sewerage Company rounds out the list of major debtors, owing KES 2.27 million, while a further KES 52.24 million is owed by other government agencies.
PS Kilemi, in his remarks, acknowledged the adverse impact these debts have had on New KCC’s ability to meet its financial obligations. “New KCC is failing to meet its obligations because of supporting government agencies. We need the help of this committee for the outstanding debt to be paid,” he stated, emphasizing the urgency of the situation.
The meeting was convened in response to a statement requested by Eric Muchangi (Runyenjes), who sought clarification on delayed payments to dairy and coffee farmers in Embu County by various cooperatives. The issue of delayed payments has been a point of contention for some time, with farmers bearing the brunt of the delays.
Addressing this concern, PS Kilemi assured the committee that while there had been delays in the past, the situation had significantly improved. He noted that payments to dairy and coffee farmers are now up to date until June 2024, and that the remaining arrears would be cleared by the end of the month.
