The Kenya Broadcasting Corporation (KBC), Postbank and South Nyanza Sugar Company (Sony) reported a combined Sh7.6 billion loss in the year ending June, leading the list of government commercial entities that made negative returns.
The State broadcaster, which made a loss of Sh5.5 billion, has for many years led the list as it suffers stiff competition from private media houses.
The Public Service Commission Annual Report 2014 says that Postbank made a loss of Sh1.4 billion, Sony Sugar (Sh730 million), Muhoroni Sugar (Sh605 million), Chemelil Sugar (Sh443 million) and Nzoia Sugar (334 million).
The four sugar firms which have been in loss making territory for years over operational inefficiencies are set to be sold to private investors but this has stalled as county governments demand more time.
KBC’s financial troubles arise from a government- guaranteed loan of Sh2.3 billion that the firm took in 1991 to acquire medium-wave equipment, but defaults, penalties and interest loaded on the principal have seen the liability surge to Sh20 billion.
The money was borrowed on the strength of cashflows expected from the sale of television permits that were paid on all TV sets in the country.
The permit fees of Sh1,000 per set were outlawed with the liberalisation of the broadcasting sector in 1997, denying KBC nearly Sh1 billion in annual income.
Kenya Cooperative Creameries, another state corporation that was revived from near collapse by the government continues to make losses. In the period, it posted a Sh173 million loss.
The company wants to build a powder milk plant in Eldoret as it sets sight on the Dubai and Qatar markets.
The firm which is also set to be privatised is facing stiff competition from Brookside Dairies associated with President Uhuru Kenyatta’s family and which has a 44 per cent market lead.
Other firms that made losses include the Numerical Machine Complex (Sh52 million), the National Museums of Kenya (Sh72 million), the National Cereals and Produce Board (NCPB) (Sh150 million)
and the Consolidated Bank of Kenya (Sh274 million).
The NCPB had been unable to offload old maize stock from its stores after millers shunned it. It was forced to sell the old stocks at Sh2,300 for the best grade and Sh1,600 for the second best grade.
The State had purchased the maize at between Sh2,800 and Sh3,000 per bag
Source; Business Daily
