Tobiko seeks to reinstate Nema construction fee

Property developers will resume paying construction levies to the environment State agency if a petition by Environment Cabinet Secretary Keriako Tobiko is accepted by the Treasury.

Mr Tobiko wants the Treasury to reverse a directive that banned collection of environmental impact assessment (EIA) levy paid to the National Environment Management Authority (Nema).

The Treasury in 2016 scrapped the levies charged by Nema and National Construction Authority (NCA) in a plan expected to ease the burden of investors seeking to venture into real estate and fast-track procedures to start such businesses.

Mr Tobiko told Parliament Thursday that the scrapping of the EIA fees paid to the Nema has had unintended negative impact on the agency’s activities.

“Nema has very serious challenges of resources. The removal of EIA fees which used to be the main source of funds to Nema has had very serious unintended impact and is currently unable to undertake certain activities.

“We have taken up this matter with the Treasury and to very highest level of government to see if the levies can be reinstated,” Mr Tobiko told the Senate committee on Environment.

Before the imposition of the ban, contractors used to pay for environmental audits between Sh10,000 and Sh40 million depending on the risk levels of their projects.

Developers whose projects exceed Sh5 million also paid a levy of 0.5 percent of the value of the contract to the NCA before they could start work.

As a result of the scrapping of construction levies paid to Nema and NCA, taxpayers have been forking out Sh1.3 billion annually to sustain the activities of the two parastatals.

Nema had projected that it would have been collecting Sh1.38 billion by 2020 before the fees were scrapped.

Removal of the EIA fees was meant to lower project costs and sharpen Kenya’s competitive edge.

This, however, cut the income of Nema and transferred the burden to taxpayers.

“The directive was a well-intentioned decision aimed at easing the cost of doing business. Businesses complained of too many fees and it was decided that Nema charges be done away with,” Mr Tobiko said.

“However, this has had a very negative unintended impact on Nema.”