Taxpayers paid an additional Sh362 million to sustain the environmental watchdog in the year to June 2017 after the scrapping of construction levies that rich investors previously paid to the agency.
The Auditor-General has revealed that Treasury allocation to the National Environment Management Authority (Nema) increased to Sh615 million from Sh253 million in 2016.
The Cabinet last November scrapped the environmental impact assessment (EIA) fees paid to the Nema to lower project costs and sharpen Kenya’s competitive edge.
This cut the income of evaluating fitness of construction projects to the environment by Sh268 million to Sh404 million, transferring the burden to taxpayers. “This marked a decrease of 39 percent from the previous year mainly attributed to the scrapping of the EIA fees,” said the audit.
Contractors used to pay a fee of between Sh10,000 and Sh40 million to Nema for environmental audits depending on the risk levels of their projects.
Besides Nema levies, the Cabinet abolished the fees charged by the National Construction Authority on projects exceeding Sh5 million, which attracted a levy of 0.5 per cent of the value of the contract.
Parliament criticised the scrapping of the construction levies, arguing it will expose taxpayers to a higher financial burden while cushioning wealthy investors.
“The scrapping of the environmental impact assessment fees which used to be paid to Nema amounts to Wanjiku [taxpayers] subsidising the private sector,” the MPs said earlier in a report.
Private investors, through the Kenya Private Sector Alliance, had lobbied President Uhuru Kenyatta to abolish the charges.
The Mining ministry in 2014 started collecting a two per cent royalty on construction materials — increasing the cost of quarry stones, concrete blocks, hardcore, ballast and sand.