Privatization Act

6. The Chairman or a member of the Commission appointed under paragraph (d) of section 5(1) shall hold office for a period of three years and shall be eligible for reappointment for one more term.

7. (1) The Chairman may resign by written resignation addressed to the President.
(2) A member appointed under paragraph (d) of section 5(1) may resign by written resignation addressed to the Minister.

8. (1) The President may remove the Chairman, and the Minister may remove a member appointed under paragraph

•  of section 5 (1), on a ground set out in subsection (2).

The grounds referred to in subsection (1) are if the Chairman or member–

•  is absent without reasonable excuse from three consecutive meetings of the Commission of which he has had notice;
• becomes an undischarged bankrupt;
• is convicted of a criminal offence;
•  is incapacitated by reason of prolonged physical or mental illness from performing his duties as the Chairman or member; or
• is otherwise unable or unfit to discharge the functions of his office.

9. The Commission shall pay the members of the Commission such remuneration and allowances as are determined by the Minister in consultation with the State Corporations Advisory Committee established under the State Corporations Act.

10. (1) The Minister shall, through a competitive process, appoint an executive director of the Commission who shall be the chief executive officer of the Commission and who shall, in addition, perform such duties as the Commission shall assign to his office.

No person shall be appointed as Executive Director unless he possesses experience and expertise in either financial management, banking or economics and in addition has experience and expertise in matters of public policy.
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11. (1) The Commission shall appoint such other employees, subordinate to the Executive Director; as it considers necessary to assist the Executive Director in discharging his duties and responsibilities.

The Commission may delegate to the Executive Director the appointment of employees of the Commission of such ranks as the Commission shall specify.

12. The Minister shall determine, in consultation with the State Corporations Advisory Committee established under the State Corporation Act, the terms and conditions of service of the employees of the Commission, including the Executive Director.

13. The business and affairs of the Commission shall be conducted in accordance with the First Schedule but, subject to the Schedule, the Commission may regulate its own procedures.

14. The Commission shall be funded from the following–

• such amounts as are appropriated by Parliament; and
• such grants and donations as the Minister may approve.

15. The Commission shall be audited in accordance with the Public Audit Act, 2003.
16. (1) The Commission shall cause an annual report to be prepared for each financial year.
Without limiting what may be included in the annual report, the annual report shall include–

• the audited financial statements of the Commission;
• where a state corporation was privatized during the year, a statement of the assets and liabilities of the state corporation and the proceeds from the privatization; and
• such information as the Minister may direct.

The Minister shall lay the annual report before the National Assembly not later than seven days after the National Assembly first meets after the Minister has received the report.

Part art III – The Pri vatiati zatiati on Progra mme

17. (1) There shall be a privatization programme.

• The privatization programme shall be formulated by the Commission and approved by the Cabinet.
• The privatization programme shall be published in the Gazette.
• The privatization programme may be amended and subsections (2) and (3) shall apply with respect to any such amendments.

18. (1) In formulating the privatization programme the Commission shall have regard to the desired benefits of the programme as described in subsection (2).

The desired benefits of the privatization programme referred to in subsection (1) are the following–

• the improvement of infrastructure and the delivery of public services by the involvement of private capital and expertise;
• the reduction of the demand for government resources;
• the generation of additional government revenues by receiving compensation for privatizations;
• the improvement of the regulation of the economy by reducing conflicts between the public sector’s regulatory and commercial functions;
• the improvement of the efficiency of the Kenyan economy by making it more responsive to market forces;
• he broadening of the base of ownership in the Kenyan economy; and
• the enhancement and development of the capital markets.

19. (1) The Commission may review the assets and operations of a public entity for the purposes of determining whether to include a privatization relating to the public entity in the privatization programme.

A review described in subsection (1) may be made at the request of the Minister responsible for the public entity or on the Commission’s own initiative.

20.The Minister may, with the approval of the Cabinet, make regulations requiring the Commission to include, in the privatization programme, a transaction that is not a privatization and this Act shall apply with respect to such a transaction as though it were a privatization.

21. The Commission shall have the exclusive authority to manage and implement the privatization programme.
22. (1) A privatization that is not included in the privatization programme may be implemented and managed by the responsible public entity, subject to subsection (2).

A privatization that is within one of the following classes shall not be implemented unless it is included in the privatization programme–

• the transfer of a public entity’s interests in a state corporation or other corporation;
• the transfer of the operational control of a state corporation or a substantial part of its activities;
• any other privatization prescribed by regulation.

Part art IV– Privatization on Process

23. (1) For each privatization included in the privatization programme the Commission shall make specific proposal for privatization.

The Minister shall present a report on the privatization proposals approved by the Cabinet to the relevant committee of Parliament.

24. Without limiting what else may be included, a privatization proposal shall set out the following–

• for the assets or operations being proposed for privatization–
• the purpose of the establishment or existence of the assets or operations;
• the extent to which the purpose has been met by the assets or operations including any inadequacies in meeting that purpose;
• the rights or other entitlements and resources that have been provided to meet the purpose;
• recommendations for continuing to meet the purpose; and
•  if the asset is a state corporation, the financial position of the corporation;
• the recommended method of privatization;
• the estimated costs of implementing the proposed privatization;
• recommendations for dealing with the employees directly affected by the proposed privatization, including dealing with any benefits they might be owed.
• the benefits to be gained from the proposed privatization;
• a work plan for the proposed privatization;.
• information regarding any written law, the repeal, amendment or enactment of which will be necessary for the proposed privatization to be carried out; and
• proposals on how Kenyans are to be encouraged to participate in the transaction.

25. Subject to section 28 and 29, the method of privatization may be any of the following-

• public offering of shares;
• concessions, leases, management contracts and other forms of public-private partnerships;
• negotiated sales resulting from the exercise of pre-emptive rights;
• sale of assets, including liquidation;
• any other method approved by the Cabinet in the approval of a specific privatization proposal

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