Parliament, the Foreign Affairs Ministry, and the Kenya Revenue Authority (KRA) owe Kenya Airways Sh3.54 billion, the national carrier has revealed.
Kenya Airways Chief Executive Allan Kilavuka told the Senate Committee on Roads, Transportation, and Public Works it is also seeking government assistance in repatriating funds stuck in various jurisdictions including Nigeria, Malawi, Ethiopia, and Burundi totaling Sh1.4 billion as of September 2024.
Mr Kilavuka told Senators that the KRA owed KQ Sh2.7 billion as of August 2024 in Value Added Tax (VAT) refunds.
He said the Foreign Affairs Ministry owes the national carrier Sh294 million in unpaid air tickets while the National Assembly has not cleared Sh242 million.
The Parliamentary Service Commission has not paid KQ Sh191 million, the Parliamentary Joint Services (Sh30 million), and the Directorate of Immigration Services (Sh32 million).
“The government should support us in the collection of outstanding amounts from various State agencies totalling Sh840 million as of September 2024,” Mr Kilavuka told Senators.
“The government should support payment of VAT refunds totaling Sh2.7 billion as of August 2024.”
Mr Kilavuka told the committee chaired by Kiambu Senator Karungo Thangwa that Parliament is the biggest customer of KQ.
He said other State agencies have debts that are much older than those of the National Assembly, the Parliamentary Service Commission, and the Parliamentary Joint Services.
“We invoice them but the debt remains unpaid. To be fair to the National Assembly, the Parliamentary Service Commission, and the Parliamentary Joint Services, they are our biggest customers,” Mr Kilavuka said.
“KQ’s current debt that has remained unpaid for less than 90 days, Ministry of Foreign Affairs owes us Sh213 million while the debt that is over 91 days is Sh81 million.”
Kitui Senator Enock Wambua demanded to know why Parliament had failed to clear the debts owed to Kenya Airways when they had been allocating money in the budget.
Mr Kilavuka asked Parliament to help in enforcing the Fly Kenya Policy that was developed in 2016 and aimed at prioritising KQ for air travel by government ministries, departments, and agencies in line with the Public Procurement and Asset Disposal Act.
“While KQ qualifies for preferential treatment under the law, the policy’s compliance rate is only 30 percent, primarily due to lack of enforcement mechanism and KQ often being outpriced by travel agents’ markups,” Mr Kilavuka said.
He said the national carrier has proposed and written to the National Treasury for registration of a Special Economic Zone (SEZ).
Mr Kilavuka said KQ requested the registration of SEZ for identified activities on its infrastructure at the Jomo Kenyatta International (JKIA), and the Pride Centre in Embakasi.
“With the above, KQ intends to venture into the specialised field of engine repair and overhaul. This will not only provide a service to our fleet but also third-party carriers,” Mr Kilavuka said.
“To make the venture competitive and commercially viable, a SEZ is a necessity as it will provide a raft of tax benefits and hence attract the required partnership with KQ to establish this facility.”
Mr Kilavuka said the SEZ will be a game changer and the specialised field of engine repair and overhaul facility will be the second similar facility in East and Central Africa after Ethiopia.
He asked the government to enforce the Air Service Agreement for Kenya carriers to ensure reciprocity.
Mr Kilavuka said KQ for instance operates only 10 weekly flights between Kenya and the Middle East compared to 29 weekly flights done by the Middle East carriers.
