Statement by the Prime Minister, the Rt Hon Raila Odinga July 8, 2008 The Grand Regency Hotel With permission, Mr Speaker, Sir, I wish to make a statement about the controversy surrounding the sale of the Grand Regency Hotel. I have decided to make my first Prime Ministerial statement on this subject to this House as I am a fervent advocate and admirer of parliamentary democracy. The media has a vital role to play, but on some subjects I did not wish to inform the people of Kenya what I knew, when I knew, and what I did through press conferences or paid advertisements. This House occupies a central role in Kenyan politics. My loyalty is to the supremacy of this parliament rather than any individual. This House has the power and responsibility to question how and when government decisions are made to ensure greater transparency and that highest standards of financial probity are maintained. I value this immensely. With these few opening remarks I wish to share the following sequence of events that will inform the members of my role as Prime Minister. On April 23 this year I received a telephone call from the Governor of the Central Bank who told me that there was something he wished to share with me as Prime Minister, concerning adverse stories appearing in the media. I met him in my office the same evening. The Governor presented me with an eight-page, undated, unsigned, typed document which purported to give a background to the Central Banks involvement with Kamlesh Pattni and the case of the Grand Regency hotel, in which the Bank had a charge over the land and buildings. Mr Speaker, Sir, I will be placing this document and others in my possession in the Library of the House. The document noted that the Bank had held a Board Meeting on April 7, 2008, to chart the way forward. It stated that the Libyan government was very eager to have a foothold in the hotel industry and that consultations have been ongoing, at the highest levels of the two governments, where it has been agreed that Libyan investors be encouraged to purchase the Grand Regency hotel when the opportunity arises. The investors had agreed to buy the hotel as a going concern and at market value. The Governor told me a deal had in fact been concluded on 23rd April with the Libyan investors, who had paid 10 per cent of the purchase price of US$45 million but the deposit was not made until 8th May. This was the narrative according to the Governor of the Central Bank. The Finance Minister, on his part, told Parliament that the hotel had not been sold on 29th April. He informed the public that the hotel would be sold through public auction. This was the rapid rebuttal from the Minister of Finance. I then began reading in the media often contradictory statements. Because of this, on 25th April 25, two days after my meeting with the Governor of the Central Bank, I directed my Chief of Staff, to write to the Director-General of the Kenya Anti-Corruption Commission. In this letter, I requested information on or sight of: · the status of the receivership accounts relating to the hotel; · the status of pending civil suits filed by the Commission against Pattni and his codefendants; · the surrender and transfer documents; · the consent orders/extracted orders as might have been made; · the counsel who advised on and prepared the transactional documents; · the breakdown of the transaction costs; · how the transaction had been or was being handled in the context of the Privatisation Act; and · all other relevant documents, including correspondence exchanged over the transaction. The letter was copied to the Attorney-General, to the Finance Minister and to the Governor of the Central Bank, and to Head of the Civil Service. On June 12th I received a reply from the Director General of KACC confirming that the Grand Regency hotel had been recovered from Pattnis Uhuru Highway Development Ltd and handed over to the Central Bank of Kenya. Attached to the letter was a copy of the Court Order issued under Civil Suit No. 111 of 2003, instituted under the Kenya Anti-Corruption and Economic Crimes Act, showing that a settlement had been reached between the Bank and Pattni regarding the handing-over of the Grand Regency in exchange for the Banks abandoning all claims against Pattni and all other defendants in the case. The KACC however did not furnish me with all the documents as per my request of 25th April. I was thus forwarded partial evidence but not the whole so I can make an informed assessment. What precipitated my action to call the Cabinet Committee on Finance, Administration and Planning was that the Minister of Lands discovered that the transfer had been mysteriously effected on 25th June and made a press briefing to that effect on the same day. On 27th June the Finance Minister for the first time acknowledged that indeed the hotel had been sold. At the meeting held on 1st July the Cabinet Committee constituted a technical sub-committee with the mandate to collect and review all available documents and records relating to sale of the Grand Regency Hotel. The Committee reported back on the evening of 1st July and by that time this House had carried the motion of No Confidence in the Minister of Finance. The Committees deliberations, observations and findings compelled them to make recommendations that the Minister for Finance and others be directed to step aside until an in-depth investigation on the purported sale are carried out. I am very pleased that the Minister of Finance has deemed it important to step aside. This is an honourable action for which I commend him. Mr Speaker, Sir let me at this juncture say that the Government values Libyan investment and we have no quarrel with the Libyan government. In fact the Libyan investors are not only interested in hotel developments but have also expressed interest in refinery, pipeline and other infrastructural projects. I wish to assure the Libyan investors that the Government is committed to resolving the sale of Grand Regency hotel in a mutually agreeable manner. As this crisis was raging on during the last two weeks I also heard that some of our development partners were considering withdrawing financial support and development assistance. The news headlines may have also deterred potential investors that Kenya is back in business as before where financial transparency and accountability are just meaningless words. Well my message to them is that this is the new Kenya where people regardless of their status are accountable for their actions. Justice for all but not the chosen few remains our motto. The establishment of good governance i.e. the practice by political leadership of accountability, transparency, openness, predictability and the rule of the law is widely accepted as a critical element in securing stable economic development for market oriented growth in our country. Governance is not necessarily limited to government in which all public affairs are conducted for instance in the economic sector. Good governance depends on the extent to which a government is perceived and accepted by the general citizenry to be legitimate and responsive to the needs of the citizenry; competent in ensuring law and order and in delivery of public services; and equitable in its conduct, favouring no special interest or groups. Achieving Good Governance and overcoming the practices of profligacy and corruption inherited from the past is one of the most important challenges facing the country and our government of Grand Coalition. But in facing this challenge we must not be shackled by the fear of being perceived to be corrupt in pursuing genuine opportunities to enhance our economic development. Huku kwetu badala ya PM wetu kuweka mambo hadharani kama huyu wa Kenya yeye anaishia kusema yupo radhi afe mradi asiweke hadharani ufisadi wa MEREMETA. Kuna haja ya kumuazima Raila kuja kuwa PM hapa kwetu japo kwa muda?ili aweze kuweka mambo hadharani bila hofu?