The Government Owned Enterprises Bill, 2025

## SPECIALISSUE Kenya Gazette Supplement No. 143 (National Assembly Bills No.40) <!-- image --> ## REPUBLICOFKENYA ## KENYA GAZETTESUPPLEMENT NATIONALASSEMBLYBILLS,2025 NAIROBI,16thJuly,2025 CONTENT Bill for Introduction into the National Assembly- The Government Owned EnterprisesBill,2025 <!-- image --> PAGE 907 I80AIAMGO1O0 ## THE GOVERNMENT OWNED ENTERPRISES BILL,2025 ## ARRANGEMENT OF CLAUSES ## Clause ## PARTI-PRELIMINARY - 1-Short title. - 2-Interpretation. - 3-Objects. - 4-Application. - 5-Role of the Cabinet Secretary for the National - Treasury. - 6-Role of the relevant Cabinet Secretary. ## PARTII-PROCEDURE AND CRITERIA FOR ESTABLISHINGAGOVERNMENTOWNED ## ENTERPRISE - 7-Guiding principles. - 8-Procedure for establishment of a Government Owned Enterprise. - 9-Attributes of a Government Owned Enterprise. ## PARTIII-MANAGEMENT OF GOVERNMENT ## OWNED ENTERPRISES - 10-Board of Directors. - 11-Qualifications for appointment as a chairperson or member of a Board. - 12-Disqualification. - 13-—Selection panel. - 14-Qualifications of members of the selection panel. - 15-Vacancy. - 16—Procedures of the selection panel. - 17-Tenure of independent directors. - 18-Role of the Board. - 19-Board meetings. - 20-Remuneration. - 21-Audit Committee. - 22—Chief Executive Officer. - 23—Secretaryto theBoard. - 24-Staff of Government Owned Enterprises. - 25—Responsibility to the shareholders andthe Government Owned Enterprise. ## PARTIV-PERFORMANCE - 26-Business Plan. - 27—Performance management. - 28—Performance evaluation. ## PARTV-PUBLICSERVICEOBLIGATIONS - 29-Public Service Obligations. - 30-Proposals. - 31-Implementation of Public Service Obligations. ## PARTVI-REPORTING ANDDISCLOSURE - 32— Reporting. - 33-Disclosure. - 34—Financial transparency. ## PARTVI-PROVISIONSONDELEGATED POWERS - 35-Regulations ## PARTVIII-GENERALPROVISIONS - 36-Dissolution and merger of Government Owned - Enterprise. - 37-Funds of a Government Owned Enterprise. - 38-Financial year. - 39—Annual estimates. - 40- Repeals and savings. FIRSTSCHEDULE SECONDSCHEDULE THIRDSCHEDULE FOURTH SCHEDULE ## THE GOVERNMENTOWNEDENTERPRISESBILL, 2025 ## A Bill for ANACT of Parliament to provide for the establishment, control, governance, performance and ownership of Government Owned Enterprises; public service obligations in respect of Government Owned Enterprises; facilitate the reconstitution of existing Government Owned Enterprises into public limited liability companies for the transfer of the assets,liabilities and the business of the Government Owned Enterprises to companies and for connected purposes ENACTED by the Parliament of Kenya,asfollows- ## PARTI-PRELIMINARY 1. This Act may be cited as the Government Owned Enterprises Act, 2025 and shall come into operation on such day as the Cabinet Secretary for the National Treasury may, by notice in the Gazette, appoint. 2. 2.In this Act,unless the context otherwise requires— "Board' means the Board of a Government Owned Enterprise constituted in accordance with section 10; "Cabinet Secretary" means the Cabinet Secretary of the National Treasury; "Chairperson"" means a Chairperson of a Board of a Government Owned Enterprise appointed in accordance with section 10(2); "Chief Executive Officer" means a person appointed in accordance with section 15; "commencement commencementof this Act; "independent director" means an independent director of a Board of a Government Owned Enterprise appointed in accordance with section 10(3); "Government"means the national government; date" means the date of Short title and commencement. Interpretation. "Government Owned Enterprise" means a company which- - (a) is a legal person under the ownership and control of the national government; - (b) the national government or national government entity is a shareholder with more than fifty percent - of the share capital of the corporation; - (c) has been assigned financial and operational powers to carry on a business activity; - (d) as its main business, supplies goods or services in accordance with ordinary commercial principles; and - (e) is financed wholly or substantially from sources that do not require annual appropriation by National Assembly, or imposition of a tax, levy or - other charge under legislation. "relevant Cabinet Secretary" means the Cabinet Secretary for the time being responsible for the sector under which the business of the Government Owned Enterprise falls; "relevant Ministry" means the Ministry for the time being responsible for the sector under which the business of the Government Owned Enterprise falls;and "public service obligations"means obligations that the National Treasury may assign to Government Owned Enterprises which involve activities that are not financially viable to the Government Owned Enterprise and for which a subsidy,or full funding,by means of budgetary resources is required to sustain the activities. - 3.The object of this Act is to-— - (a)establish an ownership regime andlegal framework for better performance of Government Owned Enterprises and effective creation ofvalue for the public; - (b) establish governance structures that facilitate objectivesof - achievement ofcommercial Government Owned Enterprises; - (c) enhance accountability and appropriate incentives for Government Owned Enterprises to operate on commercial principles; Objects. - (d) position the Government as an informed and active owner that is neither too passive nor unduly - interfering with Government Owned Enterprises; - (e) establish a transparent public service obligations accounting and funding structure that does not interfere with commercial objectives of the Government Owned Enterprises; - (f)provide for separation and allocation of ownership - roles between the National Treasury and the relevant Ministries; - (g) establish a commercially-focused performance management framework for Government Owned Enterprises in which the National Treasury is the one-stop reference; - (h) provide for the carrying out of public service obligations, ona separate operationaland accounting basis and with contractual arrangements to give full compensationto Government Owned Enterprises for such activities, whenever Government Owned Enterprises are required to perform public service obligations; - enhance the standards of transparency - and disclosure of corporate information and periodic reports of Government Owned Enterprises; and - (j）provideamechanismby which minority shareholders in Government Owned Enterprises are enabled to elect a number of persons, for appointment as independent directors in the Board ofdirectorsthatis proportionatetothe shareholding of such minority shareholders in the Government Owned Enterprise. - 4.(1) This Act shall apply to-— - (a) Government Owned Enterprises established under the Companies Act; - (b) the Government Owned Enterprises established under the Companies Act before the commencement ofthis Act assetout in the First - Schedule;and Application. Cap.486. - (c) the Government Owned Enterprises established by other written laws before the commencement of this Act set out in the Second Schedule. - (2) Upon commencement of this Act, any new - Government Owned Enterprises shall only be established as companies under the Companies Act. - (3) This Act shall not apply to state corporations that - are established for non-commercial purposes. 5. (1) The Cabinet Secretary shall exercise ownership over the Government Owned Enterprises by- - （a) determining,based on the criteria set in section 8(3), whether or not a proposal for the establishmentof Government Owned Enterprises merits consideration and approval by Cabinet; - (b) holding shares in Government Owned Enterprises - in trust onbehalfofthenationalgovernment; - （c)nominating,through a structured,transparent and competitive search and selection process, persons to be appointed as non-executive directors of the Government Owned Enterprises, through an independent search and selection panel; - (d)entering into performance contracts with Government Owned Enterprises based on key performance indicators and agreed performance targets; - (e) designing and implementing - a performance incentive system for Boards of Directors of Government Owned Enterprises; - establishing a remuneration system for Boards of - Directors of Government Owned Enterprises; - (g) carrying out performance evaluation Government Owned Enterprises; and - of - (h) assigning,where necessary,PublicService Obligations to Government Owned Enterprises after approval by Cabinet. - (2) The Cabinet Secretary for the National Treasury shall, from time to time, and not less than once a year, publish in the Gazette a list of Government Owned Enterprises. Role of the Cabinet Secretary. ## 6.The relevant Cabinet Secretary may-— - (a)propose the establishment of a Government Owned Enterprise for consideration by the Cabinet Secretary for the National Treasury; - (b) formulate sectoral policies that shall be applicable to Government Owned Enterprises and private enterprises in the sector;and - (c) propose Public Service Obligations to the Cabinet - Secretary for the National Treasury for assignment to Government Owned Enterprises, where necessary. ## PARTII-PROCEDUREAND CRITERIA FOR ## ESTABLISHINGAGOVERNMENTOWNED ENTERPRISE - 7.The following principles shall apply when determining a request fortheestablishment ofa Government Owned Enterprise- - (a) the role for a Government Owned Enterprise to fill a gap left by the market forces; - (b) a Government Owned Enterprise shall operate on commercial principles and withadefined commercial incomestream that substantially supports the associated commercial activities; - (c)whereactivities involving tax expenditures demonstrate that public expenditure is less effective in achieving the national government objective but can effectively be undertaken on a commercial basis;and - (d) there is no overlap or duplication of functions - when establishing a Government Owned Enterprise within the national government. 8. (l) Where a Ministry requires a Government Owned Enterprise to be established, the relevant Cabinet - Secretary shall submit to the Cabinet Secretary for the National Treasury, a written request for the proposed establishment of the Government Owned Enterprise. - (2) A Government Owned Enterprise maybe - established only with the prior approval of the Cabinet,and in accordance with the Companies Act. relevant Cabinet Roles of the Secretary. Guiding principles. Procedure for the Government establishment ofa Owned Enterprise. - (3) The request of a Cabinet Secretary under subsection (1) shall be accompanied by- 2. (a) a written business case to the Cabinet Secretary for the National Treasury,with detailed justification for establishing the Government Owned Enterprise; 3. (b) the business case in subsection (3)(a) shall be informed by a feasibility assessment report for the 4. purpose of ascertaining- - i) the financial and economicviabilityof establishing the proposed Government Owned Enterprise; 6. (ii) whether or not the proposed activity cannot be achieved through an existing Government Owned Enterprise or through the private sector; 7. (iii) whether or not there is a need to establish a new Government Owned Enterprise; 8. (iv) the functions and objective thatthe Government Owned Enterprise establishment is supposed to attain; 9. howtheactivitiesofthe 10. proposed Government Owned Enterprisewill fitin the relevant Ministry's mandate and mediumterm strategy,and aid the realization of the objectives of the programmes under the relevant Ministry; 11. (vi) how the establishment of the Government Owned Enterprise shall impact the fiscal position of the Government; and 12. (vii) the amount of Government share. - (4) Where in the assessment of the Cabinet Secretary for the National Treasury the proposed establishment of a Government Owned Enterprise meets the criteria set in subsection (3), the Cabinet Secretary for the National Treasury shall submit the request to the Cabinet for consideration and approval. 14. (5)Upon approval of the establishment of the Government Owned Enterprise by the Cabinet, the - necessary establishment processes shall be undertaken by the Cabinet Secretary for the National Treasury. - (6) Where in the assessment of the Cabinet Secretary 2. for the National Treasury the request does not meet the criteria set in subsection (3),the Cabinet Secretary for the National Treasury shall inform the relevant Cabinet Secretary of the outcome of the assessment, in writing, within thirty days of receipt of the report and state the reasons thereof. 9. (1) A Government Owned Enterprise shall operate as a commercial entity and shall- 4. (a) operate for profit; 5. (b) be self-financing; 6. (c) be self-sustaining; and 7. (d) be accountable to the public through the National 8. Treasury. - (2) Notwithstanding subsection (1), a Government Owned Enterprise may,in addition to its commercial functions, perform public service obligations. - (3) A Government Owned Enterprise which also performs public service obligations shall operate on a commercial basis and shall,for the purpose of financing the achievement of public service obligations, be funded 11. through the Government budgetary resources. - (4) The operations of a Government Owned Enterprise shall be undertaken in accordance with this Act and the instrument ofincorporation. - (5) The Cabinet Secretary for the National Treasury 14. shall annuallypublish an inventory of Government Owned Enterprises in the Gazette. ## PARTIII-MANAGEMENTOFGOVERNMENT OWNEDENTERPRISES 10. (1) A Government Owned Enterprise shall be Board of Directors. managed by a Board of Directors which shall consist of- 2. (a) a chairperson,who is an independent director; 3. (b) six persons who are independent directors; Attributes of a Government Owned Enterprise. - (c) one person who is a public officer nominated by the Cabinet Secretary for the National Treasury - from within the National Treasury; - (d) one person who is a public officer designated in writing by the relevant Cabinet Secretary for the relevant Ministry; and - (e) the chief executive office who shall be an ex- - officio member of the Board. - (2) The Board of directors shall elect the chairperson from among the independent directors. - (3) The Cabinet Secretary for the National Treasury shall nominate persons to be appointed by a Government - Owned Enterprise as independent directors. 11. A person shall be eligible for appointment as a chairperson or member of the Board of a Government - Owned Enterprise,if the person— - (a) has proven business leadership or relevant - professional experience; - (b) has served in a senior management or leadership - position for a period of at least five years; - （c)has not served in the same Government Owned Enterprise as an employee in the immediately preceding five years;and - (d) meets the requirements of Chapter Six of the - Constitution. 12. (1) A person is not qualified to be appointed as an - independent director of a Government Owned Enterprise, if that person- - (a) was employed by the GovernmentOwned Enterprise or its related parties, including its major shareholders,in the preceding five years; - (b) is an adviser or consultant to the Government Owned Enterprise or its related parties and is affiliated with a company that is an adviser or consultant to the Government Owned Enterpriseor - its related parties; Qualificationsfor appointment as a chairperson or member ofa Board. Disqualification. - (c) is affiliated with a significant customer or supplier - of the Government Owned Enterprise or its related parties, including banks or other financial institutions owned by the Government or any of its major shareholders; - (d) has personal service contracts with the Government Owned Enterprise, its related parties, or its senior management; - (e) is affiliated with any organisation, that receives significant funding from the Government Owned Enterprise or its related parties; - (f) is employed as an executive of another company where any of the company's executives serve on that company's board of directors; - (g) is a member of the immediate family of an individual who is, or has been during the immediately preceding five years, employed by the Government Owned Enterprise or its related - parties as an executive officer; - (h) is, or has in the immediately preceding five years has been, affiliated with or employed by a present or former auditor of the Government Owned Enterprise or of a related party; - (i) is a controlling person of the Government Owned Enterprise (or member of a group of individuals or entities that collectively exercise effective control over the company) or such a person's close relative,widow,in-law,heir, legatee,and successor of any of the foregoing or the executor is a controlling person of the Government Owned Enterprise; - has been affiliated with a political party in the - immediatelypreceding fiveyears;or - (k) is a director in another company or other companies producing substantially similar goods or services as the Government Owned Entity and whose combined market share is more than forty percent. - (2) For purposes of this section- 2. (a) "immediate family members" 3. means parents, children and siblings; and 4. (b)"affiliatedwith"means havingan 5. official connection to, in the case of a political party, to a governingbodyof apolitical party yorhas identified with a political party for purposes of vying for a political office". 6. 13.(1) The Cabinet Secretary shall appoint an independent search and selection panel which shall conduct a structured, transparent and competitive process of search and selection of persons suitable for nomination by the Cabinet Secretary f for appointment by the respective Government Owned Enterprises as independent directors. 7. (2)In the case of Government Owned Enterprises that are not wholly-owned by the Government,the Cabinet Secretary shall, through the process provided in subsection (1) participate in the nomination and where necessary election by shareholders of persons to be appointed as independent directors and shall nominate or elect a number of directors proportionate to the Government shareholding in the Government Owned Enterprise. - (3) Subject to subsection (2),the Cabinet Secretary for the National Treasury shall leave any remaining vacancies in the Boards of directors to be filled by persons nominated or where necessary,elected by minority shareholders to the extent that the proportionate shareholding of such minority shareholders may allow. - (4) The independent directors nominated or elected by minority shareholders shall meet thequalifications ofan independent director and shall fulfil the fit and proper requirements that the Cabinet Secretary shall issue. - (5) The members of the search and selection panel 11. shall consist of- 12. (a) four persons, who are not public officers appointed by the Cabinet Secretary for the ; 13. (b) one person who is a public officer appointed, by 14. the Cabinet Secretary ， from the National Treasury; and Selection panel. - (c) one person who is a public officer appointed in writing by the Principal Secretary for the State Department responsible for the sector under which the Government Owned Enterprise for which the recruitment is being undertaken falls. - (6) The Chairperson of the search and selection shall be elected by the members of the search and selection panel from among the persons in the panel who are not public - officers. - (7) The members of the search and selection panel other than the members under subsection (5)(b) and (c) shall serve on a part-time basis for a non-renewable term of three years. - (8) In appointing persons to be members of the search and selection panel, the Cabinet Secretary for the National Treasury shall determine and apply an objective set of criteria, which criteria shall include diversity, independence of the persons and fulfilment of fit-and-proper requirements that the Cabinet Secretary for the National Treasury shall - issue. - (9) The search and selection panel may, from time to time, co-opt into the panel persons with specific expertise and skills. - (10) The search and selection panel shall determine and apply an objective set of criteria for search and selection of persons, which criteria shall include diversity, independence of the persons and fulfilment of fit-andproper requirements that the Cabinet Secretary for the National Treasury shall issue. - (11) The Cabinet Secretary for the National Treasury shall facilitate the operations of the selection panel. - 14.1) A person shall qualify for appointment as a member of the selection panel, if that person- - (a) holds a degree from a university recognised in Kenya in a relevant field; - (b) has demonstrable leadership experience in the - private or public sector; - (c) has served in a senior management position for a period of at least ten years; and Qualifications of members of the selection panel. - (d) meets the requirements of Chapter Six of the - Constitution. - (2) A person shall not qualify for appointment as a - member of the selection panel,if thatperson- - (a) is a member of Parliament or county assembly; - (b) is a member of a governing body of a political party; - (c) is an undischarged bankrupt; - （d)has been convicted of a felony;or - (e) has beenremoved frompublicoffice for contravening the provisions of the Constitution or any other law. 15. A person shall cease to be a member of the search - and selection panel only,if the person- - (a) becomes incapacitated to discharge their duties; - (b) is adjudged bankrupt by a competent court of law; - （c) becomes absent without the permission of the search and selection membersformore than three consecutive meetings of the panel; - （d) resigns by written notice given to the other members of the panel and to the Cabinet Secretary - for the National Treasury; - (e) is prohibited from being a panelist by a written law; - (f)is convicted of a criminal offence by a competent - court of law;and - (g) becomes a holder of a political office whether or - notin a legislativerole. - 16.(1) The selection panel shall develop its procedures for the search and selection ofpersons suitable for nomination as members of the Boards of directors this Act. - (2) The selection panel shall maintain a proper record of all its meetings, including minutes, in such manner as it may determine. Vacancy. Proceduresof the selection panel. - 17.(1) In the case of a Government Owned Enterprise that is wholly-owned by the Government, an independent director once appointed shall serve for a three-year term, renewable once. - (2) In the case of a Government Owned Enterprise that is not wholly-owned by Government, an independent director once appointed shall serve for a period that may be required, by a legal instrument, before a director is due to retire by rotation. - (3) Subject to subsection (2), the retirement by - rotation shall be in such a way that at each rotation,onethird of themembers of theBoard shall be retained. - (4) A person shall cease to be an independent director - only, if the person-— - (a) becomes incapacitated to discharge the duties of a director; - (b) is adjudged bankrupt by a competent court of law; - (c) becomes absent from three consecutive meetings of the Board without the directors'permission; - (d)resigns by written notice given to the other - directors or to the Government Owned Enterprise; - (e) is prohibited from being a director by a written - law; - (f) is convicted of a criminal offence by a competent - court of law; - (g) becomes a holder of a political office, whether or not in a legislative role; - (h) becomes an employee of the Government or a - Government Owned Enterprise;and - i) ceases to meet the qualifications of an independent director in the manner stipulated in section 12. - (5) A person shall not cease to be an independent director for reasons other than those stipulated in subsection (3). 18. The Board of a Government Owned Enterprise Role of thc Board. shall be responsible for-- Tenure of independent directors. - (a) the appointment and removal of the Chief Executive Officer; - (b) the determination of the terms and conditions of employment of the Government Owned Enterprise staff,taking into consideration all relevant factors, including industry dynamics and the sustainability ofthe Government Owned Enterprise,subject to such guidelines as the Cabinet Secretary for the National Treasury may issue; - (c) setting of the Government Owned Enterprise strategic direction and approval of strategicplans; - (d) the approval of annual budgets and the related - fundingfor a Government Owned Enterprise level; - (e) setting key performance indicators for the Chief Executive Officer; - the establishment of risk governance and risk management systems and processes, including setting the risk appetite for the business of the Government Owned Enterprise, taking into consideration shareholder risk preference; - (g) establishing and overseeing internal control systems and their continuous testing for efficiency - and effectiveness; - (h) performance evaluation of the Chief Executive Officer and top-level management; - entering into performance contracts with the National Treasury; - putting in place systems and processes to ensure compliance with alllegal and regulatory requirements and frameworks; - (k) putting in place succession management framework and business continuity plan - comprising- - (i) nomination processes to identify candidates for considerationby the Cabinet Secretaryfor the National Treasury for appointment to the Board; and - (ii) succession plans for the Chief Executive Officer and other critical positions within management ranks of the Government Owned Enterprise;and - (l) establishment and implementation of a Board self- - evaluation system. - 19.(1) The Board of a Government Owned Enterprise Board meetings. - shall meet- - (a) at least once in every three months; and - (b) at other times that the Board considers necessary for the efficient management of the business and - affairs of the Government Owned Enterprise. - 20.(l) The remuneration of directors of Government Owned Enterprises shall be governed by the remuneration structure and guidelines issued by the Cabinet Secretary for - theNational Treasuryfrom time to time. - (2) The remuneration for directors may include- - (a) directors' fees to be recommended by directors of - individual Government Owned Enterprises with the concurrence of the Cabinet Secretary for the National Treasury and determined at the Annual General Meeting or, in the case of Government Owned Enterprises wholly-owned by Government, approved by the Cabinet Secretary for the National Treasury; - (b) sitting allowance to be determined by the Cabinet - Secretary for the National Treasury; and - (c) a bonus-type annual pay as a reward based on the extent of achievement of targets under the performance contract signed between the Cabinet Secretary for the National Treasury and the Government Owned Enterprise. - (3) The directors' fees and sitting allowances under - subsections (2)(a) and (b) shall not be performance based. - 21.(1) Every Board of a Government Owned Enterprise shall establish an audit committee and majority of them,including its chairperson, shall be independent - directors. - (2) The audit committee shall be responsible for- Remuneration. AuditCommittee. - (a) oversight of the internal audit function and other assurance providers; - (b) engagement with external auditors; - assurance on appropriateness of measures to safeguard the assetsof a Government Owned - Enterprise's assets; - (d) the review of all reports and communication with external auditors; - （e) thereviewof annual financial statementsof the Government Owned Enterprise, prior to their approval by the Board; - ensuring coordination between the internal and external auditors of the Government Owned Enterprise; and - (g) overall assurance to the Board on the system of internal control,risk governance and compliance systems. - 22.(1) Every Board of a Government Owned Enterprise shall have a Chief Executive Officer who shall be competitively recruited and appointed by the Board on such terms and conditions as may be specified in the instrument of appointment. - (2) The Chief Executive Officer of a Government - Owned Enterprise shall be a member of the Board of directorsbut shall not have the power to vote. - (3) A person shall qualify for appointment as a Chief - Executive Officer,if such person- - (a) holds a degree in the relevant field from a - university recognized in Kenya; - (b)has atleast tenyearswork experienceina relevant field; - (c) has served in a position of senior management for a period of at least five years;and - （d)meets the requirements of Chapter Six of the - Constitution. - (4)A person shall not qualify for appointment as a Chief Executive Officer if such person- Chief Executive Officer. - (a) is a member of Parliament or County Assembly; - (b) is a member of a governing body of a political party; - (c) is an undischarged bankrupt; - (d) has been convicted of a felony; or - (e) has been removed from public office for - contravening the provisions of the Constitution or any other written law. - (5) A Chief Executive Officer shall hold office for a - term of three years and shall be eligible for reappointment for onefurther term - (6) A Chief Executive Officer shall— - (a) be responsible to the Board of the Government Owned Enterprisefor the day-to-daymanagement ofthe affairsof the Government Owned Enterprise;and - (b) perform such other functions as the Board may direct. - (7) A Chief Executive Officer may be removed from - office on any of the following grounds— - (a) serious violation of the Constitution or other law; - (b) gross misconduct; - (c) physical or mental incapacity to perform the functions of the office; - (d) unsatisfactory performance; or - (e) bankruptcy. - (8) Before removal under subsection (7), the Chief - Executive Officer- - (a) may be suspended from office by the Board; - (b) shall be informed, in writing, of the reasons for the intended removal;and - (c) shall be given an opportunity to put in a defence against any such allegations. - 23.(1) Every Government Owned Enterprise shall have a secretary to the Board who shall be qualified in terms of the law governing the practice of public secretaries and appointed by the Board. Secretary to the Board. - (2) The secretary to the Board shall hold and vacate the office of secretary in accordance, with the terms specified in the instrument of appointment to that office. - (3) The secretary to the Board shall attend all the meeting, but shall not be entitled to vote on any such 3. meetingsof theBoard andmayoffer an advisoryopinion or take part in the deliberations on any matter arising at the matter. 24. A Government Owned Enterprise may appoint such officers and other staff as are necessary for the proper discharge of the functions of the Government Owned Enterprise, upon such terms and conditions of service as the Board may determine, subject to such guidelines as the Cabinet Secretary for the National Treasury may issue. 5. 25.(1) The Board shall ensure its obligations to shareholders of the Government Owned Enterprise are fulfilled and that the shareholders are duly informed in a timely manner of all material events through shareholder meetings and other communications as necessary. - (2) The Board shall develop and implement a code of conduct for the members of the Board,as well as the employees of the Government Owned Enterprises,with a view to ensuring adherence to the highest professional standards and corporate values. - (3) Thecode of conduct developed under this subsection(2) shall be effectively communicated within the Government Owned Enterprise together with supporting policies and procedures,including adequate systems and controls for the identification and the redress of grievances arising from unethical practices. ## PARTIV-PERFORMANCE 26. (1) The Board of a Government Owned Enterprise shall, prior to the commencement of a financial year, adopt a business plan based on its strategicplan. - (2) The business plan shall be effective on the first day 3. of the financial year to which it applies. - (3) The business plan of a Government Owned Enterprise shall form the basis of annual performance contracts to be signed between the Cabinet Secretary for 5. the and the Government Owned Enterprise. Staff of Government Owned Enterprises. Responsibility to the shareholders and the Government Owned Enterprise. Business plan. - 27.(1) The Cabinet Secretary shall by meansof - performance contractsconvey to each Government Owned Enterpriseperformance targetsfor thespecifiedperiod. - (2) The Board of a Government Owned Enterprise shall enter into performance contracts with the Cabinet Secretary for the National Treasury. - (3) The performance contracts under subsection (1) shallbe designed to enhance the commercialperformance of a Government Owned Enterprise in ways thatwill- - （a) safeguard the long-term sustainability of the Government Owned Enterprise; - （b)enabletheshareholderstomake areturn commensuratewith the level ofinvestmentmade in the Government Owned Enterprise;and - （c)minimize the fiscal cost and risks emanating from the Government OwnedEnterprise to thenational exchequer. 28. (1) The Cabinet Secretary shall be responsible for performance evaluation of Government Owned Enterprises and for purposes of performance evaluation, may co-opt relevant external experts that may include those from relevantMinistries. - (2)Theperformanceevaluation of Government Owned Enterprises under subsection (l) may be based on audited financial statements and any other parameters as the Cabinet Secretary for the National Treasury may - determine. - (3) The Board of a Government Owned Enterprise shall beresponsible for the evaluation of theperformance of the Chief Executive Officer. - (4)TheCabinet Secretarymaydeterminea - performance incentive systemforBoardsofGovernment Owned Enterprises. - (5) The Board of a Government Owned Enterprise - may determine a performance incentive system for the Chief Executive Officer and the rest of the staff of the Government Owned Enterprise. ## PARTV-PUBLICSERVICEOBLIGATIONS 29. (1) For purposes of this part, public service 2. obligations of a Government Owned Enterprise means Performance management. Performance evaluation. Public Service Obligations. obligations to undertake activities that the Board of a GovernmentOwnedEnterpriseestablishestothe satisfaction of the Cabinet Secretary for the National Treasury- - （a) are not in the commercial interests of the Government Owned Enterprise toperform; - (b) arise because of a direction,notification or duty to the public by the Government Owned Enterprise; - and - (c) do not arise because of the application of the - commercial principles. - (2)Notwithstanding subsection (1),the Cabinet - Secretary for the National Treasury shall not assign public serviceobligationstolistedGovernmentOwned Enterprises. 30. (1) A proposal on Public Service Obligations to be assigned to a Government Owned Enterprise may be originated by the relevant Ministries for consideration by - the Cabinet Secretary for the National Treasury. - (2) The Cabinet Secretary may, upon evaluating the merits of the proposal of the public service obligations for assignment to a Government Owned Enterprise,submit the proposal to the Cabinet for consideration. - (3) The Cabinet Secretary shall assign a public service obligation toa Government Owned Enterpriseonly after approval by Cabinet. - (4)The public service obligations shall be- - (a) costed and accounted for separately; - (b) audited separately;and - (c)time bound. - (5) The National Treasury shall not originate public - service obligations for assignment to a Government Owned Enterprise. - (6) The Cabinet Secretary may limit the number of public service obligations that may be assigned to an - individual Government Owned Enterprise. - (7) Public service obligations shall not form part of performance contracts to be signed between the Cabinet - Secretary and a Government Owned Enterprise. Proposals. - (8) The Cabinet Secretary may,from time to time, 2. issue guidelines on public service obligations. 31. (1) Before submitting a proposal to the Cabinet, 4. the Cabinet Secretary may in writing inform the Government Owned Enterprise of the proposal of the public service obligation. 5. (2)Within thirty days ofreceiving the written proposal from the Cabinet Secretary, the Government Owned Enterprise shall respond to the notice in writing, stating with reasons, whether or not the Government Owned Enterprise agrees to give effect to the proposal. - (3) If the Government Owned Enterprise agrees to the proposal under subsection (2), the Cabinet Secretary, the relevant Ministry and the Government Owned Enterprise shall enter into negotiations to agree on the arrangements under which the Government Owned Enterprise can give effect to the proposal without acting inconsistently with its primary objective. - (4) If an agreement is reached under subsection (3), the arrangements for giving effect to the proposal shall be incorporated in a public service obligation agreement which shall- 8. (a) be in writing; 9. (b) be approved by the Cabinet Secretary and the 10. Board of the Government Owned Enterprise; 11. (c) include provision for funding or other resources to the Government Owned Enterprise; 12. (d) if it provides for the Government Owned Enterprise to provide goods or services— 13. specify the goods or services, including any - i) particular quantities; 15. specify an estimate of the annual total cost to 16. theGovernmentOwned Enterprise for providing the goods or service, and an estimate of the annual total revenue tobe received bytheGovernment Owned Enterprise for doing so; and 17. (ii) specify howtheperformance ofthe Government Owned Enterprise will be monitored and assessed in providing the goods or services; Implementation of public service obligations. - （e) include any other matter,not inconsistent with this Act, that is agreed between the Cabinet and the Board of the Government Owned Enterprise. - (5) The Public Service Obligations under a Public - Service Obligation agreement shall be binding. ## PART VI-REPORTING AND DISCLOSURE - 32.(1) A Government Owned Enterprise shall make quarterly and annual reports to the Cabinet Secretary in the manner that the Cabinet Secretary for the National Treasury may prescribe from time to time. - (2) The Cabinet Secretary may make half-yearly reports on the Government Owned Enterprise to the Cabinet and annually to the National Assembly. - (3) The Cabinet Secretary shall with respect to listed - Government Owned Enterprises,make,based on publicly available information,analysed annual reports to Cabinet and the National Assembly. - 33.(1) The Cabinet Secret shall make public,on the National Treasury website or on such other information - platforms as maybe accessible to the public- - (a) audited annual reports of Government Owned Enterprises; - (b)annual performance evaluation Government Owned Enterprises;and - resultsof - （c)reports on appointment of independent directors of - Government Owned Enterprises andt the procedures followedinarriving at such appointments. - (2) Government Owned Enterprises shall make public, on their individual websites or on such other platforms as may be accessible to the public- - (a)audited annual reports; - (b) annual performance evaluation results;and - (c)annual reportonanti-corruption activities completed. - 34.The Board shall ensure that the Government - Owned Enterprise,keeps financial records that- Reporting. Disclosure Financial transparency. - （a) correctly record and explain its transactions and financial position and performance; - (b) enable financial statements to be prepared and be - audited;and - (c) clearly identify and disclose any transactions - undertakenby the Government Owned Enterprise with any director or their close relatives,either directly or indirectly and comprising a pecuniary or non-pecuniary benefit through a company or other business established by such director. ## PARTVII-PROVISIONSONDELEGATED POWERS 35. The Cabinet Secretary may make regulations generally for the better carrying into effect of the provisions of this Act. 2. (2)The Regulations under subsection (l) may 3. prescribe-— 4. (a) a code of governance for Government Owned Enterprises; 5. (b) the procedure for merger and dissolutionof 6. Governiment Owned Enterprises; 7. （c)provisions of a savings or transitional nature relatingto thetransitionfrom theapplication of the Acts and subsidiary legislationinrelation to Government Owned Enterprises to the application of this Act;or 8. （d) any other matter necessary for the implementation of this Act. - (3) For the purposes of Article 94(6) of the 10. Constitution- 11. （a) the purpose and objective of the delegation under this section is to enable the Cabinet Secretary to make regulations for better carrying into effect the provisions of this Act; 12. （b) the authority of the Cabinet Secretary to make regulations under this Act will be limitedto bringing into effect the provisions of this Act and fulfilment of the objectives specified under this section; Regulations. - (c)theprinciples and standards applicable to the rules made under this section are those set out in the - StatutoryInstruments Act,2013. ## PARTVIII-GENERALPROVISIONS - 36.(1) A Government Owned Enterprise may be - dissolved only with the prior approval of the Cabinet and in accordance with the legislation governing the dissolution of such Government Owned Enterprise. - (2) Subject to the provisions of any law enacted for the formation, Government Owned Enterprise,a Government Owned - management and dissolution ofa Enterprise may be dissolved- - (a) upon expiry of the lifespan of a Government Owned Enterprise as may be defined in the - instrument of establishment; - (b) where a Government Owned Enterprise has carried - out the mandateforwhich itwas created; - (c)upon reorganizationof a Government Owned Enterprise and associated government functions; - and - (d) upon a merger of a Government Owned Enterprise - with another. - (3)The Cabinet Secretary shall originate and review recommendations for dissolution and mergersof Government Owned Enterprises. - (4) The Cabinet Secretary may by notice in the - Gazette prescribe guidelines for dissolution and mergers of Government Owned Enterprises. - (5) Uponapprovalby Cabinetofthe recommendations to dissolve or merge a Government Owned Enterprise,the Cabinet Secretary for the National Treasury shall cause the dissolution or merger of the Government Owned Enterprise with another and the merger shall be subject to the Competition Act. - 37.(1) The funds of a Government Owned Enterprise - shall include- - (a) such monies as may be appropriated to the Government OwnedEnterprise byNational - Assembly; No.29of2013 Dissolution and merger of Government Owned Enterprise. Cap.504. Funds of a Government Owned Enterprise. - (b) such fees, monies or assets as may accrue to or vest in the Government Owned Enterprise in the course of the exercise of its powers or the performance of its functions under this Act or any written law;and - (c) monies from any other source provided for or - donated or lent to the Government Owned Enterprise. - 38.Except as otherwise provided, the financial year of - a Government Owned Enterprise shall be the period of twelve months ending on the thirtieth June in each year. - 39.The annual estimates of Government Owned Enterprises shall beprepared in accordance with the Public Finance Management Act. - 40.(1) The Acts specified in the Third Schedule are - repealed. - (2) The provisions of the Fourth Schedule shall,upon the repeal of the Acts set out in the Third Schedule,have effect with respect to the transfer of the functions,assets liabilities of the former corporation to the Company,the Corporation and the Commission, as the case may be, and to all matters incidental to such transfer. Financialyear. Annual estimates. Cap.412A Repeals and savings. ## FIRST SCHEDULE (s.4(1)(b)) LISTOFGOVERNMENT OWNEDENTERPRISES | 1 | EastAfrican Portland Cement Company Limited | |-----|--------------------------------------------------------------------------------------------------------------------------------------| | 2. | Kenya Electricity Generating Company Limited | | 3 | KenyaPower and Lighting Company Limited | | 45 | Kenya Re-Insurance Corporation Limited | | | Agricultural Finance Corporation | | 6. | Kenya AirportsAuthority | | 7. | Kenya Development Corporation | | 8. | Kenya LiteratureBureau | | 9. | Kenya Pipeline Corporation Limited | | 10. | Kenya PortsAuthority | | 11 | KenyaRailways Corporation | | 12. | NewKenya Co-operative Creameries Limited | | 13. | Agricultural Development Corporation | | 14. | Kenya Seed Company Limited (GoK ownership through Agricultural Development Corporation) | | 15. | Kenyatta International Convention Centre | | 16. | National Cereals and Produce Board | | 17. | National Housing Corporation | | 18. | Numerical Machining Complex Limited (GoK ownership through Kenya Railways Corporation andKenyaShipyards Limited) | | 19. | Postal Corporation ofKenya | | 20. | Rivatex East Africa Limited (GoK ownership through Moi University) | | 21. | Kenya Broadcasting Corporation | | 22. | Kenya VeterinaryVaccine ProductionInstitute | | 23. | National Mining Corporation | | 24. | National Oil Corporation ofKenya | | 25. | Consolidated Bank of Kenya Limited | | 26. | Agro-Chemical and Food Company Limited (GoK ownership through KenyaDevelopment Corporation and Agricultural Development Corporation) | | 27. | Development Bank of Kenya Limited (GoK ownership through KenyaDevelopment Corporation) | | 28. | JKUATEnterprisesand Services Limited | | 29. | JomoKenyatta Foundation | | 30. | Kenya FishingIndustries Corporation | | 31. | Kenya IndustrialEstatesLimited | | 32. | Kenya Meat Commission | 33. Kenya National Shipping Line Limited 35. Kenya Petroleum Refineries Limited 34. Kenya National Trading Corporation Limited 36. Kenya Post Office Savings Bank 37. University of Nairobi Enterprises and Services Limited (GoK ownership throughUniversityofNairobi) 38. Western Kenya Rice MillsLimited 39. Bomas of Kenya(GoK ownership through Kenya Development Corporation) 40. Chemelil Sugar Company Limited (GoK ownership through Agricultural Development Corporation andKenyaDevelopment Corporation) 41. GolfHotel Limited (GoK ownership through Kenya Development Corporation) 43. KenyaBioVaxInstitute Limited 42. Kabarnet Hotel Limited (GoK ownership through Kenya Development Corporation) 44. Kenya Safari Lodges and Hotels Ltd 46. Mt. Elgon Hotel Limited (GoK ownership through Kenya Development Corporation) 45. Miwani Sugar CompanyLimited 47. Muhoroni Sugar Company Ltd 48. Mwea RiceMills Limited 49. NewKenya Planters CooperativeUnion Limited 50. NzoiaSugar Company Limited 19. 52 South Nyanza Sugar Company Limited 51. Pyrethrum Processing Company ofKenya 53. SunsetHotel Limited (GoK ownershipthroughKenya Development Corporation) 54. CommoditiesFund 55. Kenya National Multi Commodities Exchange Limited 57. School EquipmentProduction Unit 56. Nyayo Tea ZonesDevelopment Corporation 58. Government Owned Enterprises provided in the Second Schedule Cote d'Ivoire (GoK ownership through Government Owned Enterprisesprovided in theSecondScheduleLimited) 60. Government Owned Enterprisesprovided in the Second Schedule Zambia Limited (GoK ownership through Government Owned EnterprisesprovidedintheSecondSchedule Limited) 59. Government Owned Enterprisesprovided in the Second Schedule Uganda SMC (GoK ownership through Government Owned Enterprises providedin the SecondSchedule Limited) | 61. | Kibo Seeds Limited, Tanzania (GoK ownership through Kenya Seed Company Limited) | |-------|------------------------------------------------------------------------------------------| | 62. | Simlaw Seeds Kenya Limited (GoK ownership through Kenya Seed Company Limited) | | 63. | Simlaw Seeds Rwanda (GoK ownership through Kenya Seed Company Limited) | | 64. | Simlaw Seeds Uganda Limited (GoK ownership through Kenya Seed Company Limited) | | 65. | Gatitu Tea Factory Limited (GoK ownership through Nyayo Tea Zones Corporation Limited) | | 66. | Kipchabo Tea Factory Limited (GoK ownership through Nyayo Tea Zones Corporation Limited) | ## SECOND SCHEDULE (s.4(1)(c)) | STATECORPORATION | |-----------------------------------------------| | Agricultural Finance Corporation | | KenyaAirportsAuthority | | Kenya Literature Bureau | | Kenya Ports Authority | | Kenya Railways Corporation | | Agricultural Development Corporation | | Kenyatta International Convention Centre | | National Cereals and Produce Board | | National Housing Corporation | | Postal Corporation ofKenya | | Kenya Broadcasting Corporation | | Kenya Veterinary Vaccine Production Institute | | National Mining Corporation | | Kenya Fishing Industries Corporation | | Kenya Meat Commission | | Kenya Post Office Savings Bank | | CommoditiesFund | | Nyayo Tea Zones Development Corporation | ## THIRDSCHEDULE ## REPEALSAND CONSEQUENTIALAMENDMENTS TOOTHERACTS - 1.The Agriculture Finance Corporation Act is repealed. - 2.The Kenya Airports Authority Act is repealed. - 3.The Kenya Literature Bureau Act is repealed. 4. The Kenya Ports Authority Act is repealed. - 5.The Kenya Railways Corporation Act is repealed. - 6.The Agricultural Development Corporation Act is repealed. - 7.The National Cereals and Produce Board Act is repealed. - 8.The Housing Act is repealed. - 9.The Postal Corporation of Kenya Act is repealed. 10. The Kenya Broadcasting Corporation Act is repealed. 11. The National Mining Corporation Act is repealed. - 12.The Kenya Meat CommissionAct is repealed. - 13.The Kenya Post Office Savings Bank is repealed. - 14.Section 2 of the Tourism Act is amended by deleting the words "the Convention Centre" appearing in the definition of the term"tourism agencies" - 15.The Tourism Actis amended by repealing section 40. - 16.The Tourism Act is amended byrepealing section 41. 42. 17. The Tourism Act is amended by repealing section 43. 44. 45 46. 18.The Tourism Act is amended by repealing section 19. The Tourism Act is amended by repealing section 20.The Tourism Act is amended by repealing section 21.The Tourism Act is amended by repealing section - 22.The Tourism Act is amended by repealing section 47. (s.40(1)) Repeal of Cap. 323. Repeal of Cap. Repeal of Cap. 209. 395. Repeal of Cap. 391. Repeal of Cap. 444. Repeal of Cap. 397. Repeal of Cap. 338. Repeal of Cap. 117. Repeal of Cap. 221. Repeal of Cap. 411. Repeal of Cap. 306. Repeal of Cap. 493B. Repeal of Cap. 363. Amendment of section2 of Cap. 381. Repeal of section 40 of Cap.381. Repeal of section 41 of Cap.381. Repeal of section 42 of Cap.381. Repeal of section 43 of Cap.381. Repeal of section 44of Cap.381. Repeal of section 45 of Cap.381. Repeal of section 46of Cap.381. Repeal of section 47of Cap.381. - 48. - 23.The Tourism Act is amended by repealing section - 24.The Tourism Act is amended by repealing section 49. - 25.The Tourism Act is amended by repealing section 50. - 26.The Tourism Act is amended by repealing the Fifth Schedule. 27. The Crops Act is amended by repealing section 9 - 28.The Crops Act is amended by repealing section 10 29. Section 2 of the State Corporations Act is amended - in the definition of state corporation by adding the following new paragraph immediately after paragraph (vili)- - (ix)aGovernmentOwned Enterprise established before or after the commencementof the Government Owned Enterprises Act,2025. Repeal of section 48of Cap.381. Repeal of section 49of Cap.381. Repeal of section 50of Cap.381. Repeal of the Fifth Schedule of Cap.381. Repeal of section 9of Cap.318. Repeal of section 10of Cap.318. Amendment of section 2of Cap. 446. ## FOURTHSCHEDULE (s.40(2)) 1. (1) For the purpose of bringing the provisions of 2. this Act into operation, the respective Government Owned Enterprises provided in the Second Schedule shall, in exercise of the powers conferred bysection 30of the Interpretation and General Provisions Act,incorporate in their names a public limited liability company under the provisions of the Companies Act. - (2) The respective Companies shall be the successor of the Government Owned Enterprises provided in the Second Schedule and,subject to this Act,all rights,duties, obligations, assets and liabilities of the Government Owned Enterprises provided in the Second Schedule existing on the commencement date shall be automatically and fully transferred to the respective Companies and any reference to the Government Owned Enterprises provided in the Second Schedule in any contract or document shall for all purposes be deemed to be a reference to the respective Company. 4. 2.(l) Property or right vested in the respective 5. Companyby virtue of this Actwhich immediately before the commencement date, vested in the Government Owned Enterprises provided in the Second Schedule,either alone or jointlywith any otherperson- 6. (a) as trustee or custodian trustee under any trust deed, settlement, instrument; 7. (b) as executor or trustee of any person; 8. (c) as judicial trustee appointed by order of any court; 9. or 10. (d) in any other fiduciary capacity, shall, on the commencement date, vest in the Company alone or jointly with such other person, upon the same trusts and subject to the same powers, provisions, liabilities and obligations. - (2) An existing instrument or order of any court under or by virtue of which any property or right vested in 2. Government Owned Enterprises provided in the Second Companies tobe successorof Government Owned Enterprises. Cap.2. Cap.486. Trust property. Schedule in any capacity specified in subsection (1), including, in the case of a will, any grant of probate thereof,and any provision therein or any existing contract or arrangement for the payment or retention by the Government Owned Enterprises provided in the Second Schedule of remuneration for its services in any such capacity shall,on and after the commencement date, be construed and have effect, so far as the context permits, as if for any reference therein to Government Owned Enterprises provided in the Second Schedule, there were substituted a reference to the respective Company. 3. Any existing contracts, agreements, conveyances, deeds,leases, licences, permits, exemptions, powers of attorney,undertakings,securities and other instruments, whether analogous to the foregoing or not, entered into by, made with or granted or addressed to the Government Owned Enterprises provided in the Second Schedule whether alone or with any other person and whether as principal or agent shall, as from the commencement date, be binding and of full force and effect in every respect against or in favour of the respective Company as if, instead of the Government Owned Enterprises provided in the Second Schedule,the respective Company had been a party thereto, bound thereby or entitled to the benefit thereof and as if any reference,express or implied,to any director,officer or employee of the Government Owned Enterprises provided in the Second Schedule as respects anything to be done on or after the commencement date, were substituted a reference to the director,officer or employee of the respective Company who most nearly corresponds thereto. 4. Without prejudice to the provisions of any other 3. section of this Act, the following provisions shall have effectinrelation to thebusinessof the Government Owned Enterprises provided in the Second Schedule vested in the respective Companies byvirtue of this Act- 4. (a)any account between the Government Owned Enterprises provided in the Second Schedule and a customer shall,on and after the commencement date,become an account between the respective Company and the customer,with the same rights 5. and subject to the same obligations and incidents, Existing contracts. Existingbusiness. including the rights of set-off as theretofore, and the account shall be deemed to be a single continuing account: Provided that nothing in this paragraph shall affect any right of the respective Company or of the customer to vary the conditions or incidents subject to which the account is kept; - (b) any existing instruction,direction,mandate,power of attorney, authority or consent given to or by the Government Owned Enterprises provided in the Second Schedule shall have effect,on and after the - day, as if given to or by the respective Company; - (c) any security held by the Government Owned Enterprises provided in the Second Schedule for the payment of debts orliabilities,whether present or future, actual or contingent, of any person, which,is transferred to the respective Company shall,on and after the commencement date,be held by and be available to the respective Company as security for the payment of such debts and liabilities to the respective Company,and where the moneys secured by the security include future advances or liabilities of such person,the security shall,as from that day,be held by and be available to therespective Company as securityfor future advances to that person by, and future liabilities of, that person to the respective Company to the same extent to which the same was held by or available tothe Government Owned Enterprises provided in the Second Scheduleimmediatelybefore the commencement date as security for future advances or future liabilities; - (d)the respective Company shall, in relation to any security transferred or deemed to have been transferred to it and to the moneys thereby secured,be entitled to the same rights and priorities, and be subject to the same obligations andincidents,astheGovernmentOwned Enterprises provided in the Second Schedule would have been entitled and subject to if the - same had continued to beheld by the Government Owned Enterprises provided in the Second Schedule; - (e) any negotiable instrument or order for payment of - money,whether drawn,given,acceptedor endorsed before,on or after the commencement date, which is expressed to be drawn by or on, given by or to, or accepted or endorsed by the Government Owned Enterprises provided in the Second Scheduleshall on orafterthe commencement datehave effect as ifit had been drawn by or on, or given by or to, or accepted or endorsed by the respective Company; - (f)where,by the operation of the provisions of this Act, any right, liability or obligation becomes a right, liability or obligation of the respective Company,all other persons shall,on and after the commencement date,have the same rights,powers and remedies,and,in particular,the same rights and powers as to taking or defending any legal proceedings or any application to any authority, for ascertaining,perfecting or enforcing that right, liability or obligation as if it had at all timesbeen aright, liability or obligation of the respective Company; - (g)the custody of any documents,goods or other property held by the Government Owned Enterprises provided in the Second Schedule as bailee for any other person shall be transferred to the Company on the commencement date and the rights and obligations of the Government Owned Enterprises provided in the Second Schedule under any contract of bailment relating to such documents, goods or other property shall be transferred or deemed to be transferred to the respective Company on that day;and - (h) any bank or other accounts, books of accounts, revenue accounts, balancesheets,audited accounts,profit and loss accounts,actuarial or other valuations,accounting records,or any other - accountable documents held by or belonging to the Government Owned Enterprises provided in - the Second Schedule immediately before the commencement date shall on and after the commencementdatebeheld byand belong to the respective Company. - 5.(1) No existing legal or arbitration proceedings or application to any authority by or against the Government Owned Enterprises provided in the Second Schedule shall abate, be discontinued or be in any way prejudiced by reason only of the provisions of this Act,but the same may be prosecuted or continued by or against the respective Company and any judgement or award obtained by or against the Government Owned Enterprisesprovided in the Second Schedule and not fully satisfied before the commencement date shall thereafter be enforceable by or against the respective Company. - (2) In any legal or arbitration proceedings concerning, any right or liability transferred to or vested in the respective Company by this Act,a certificate under the hand of the manager of a branch of the respective Company that such right or liability has been so transferred to or vested in therespective Company shall beprima fade evidence of that transfer or vesting. - 6.(1) A person who is employed by the Government Owned Enterprises provided in the Second Schedule immediately before the appointed pension schemes. day shall on that day become an employee of the Company on the same terms and conditions of service as his existing of termination, resignation or variation, and such employment with the Government Owned Enterprises provided in the Second Schedule and the respective - Company shall be deemed to be continuous. - (2) Reference to the Government Owned Enterprises provided in the Second Schedule in any trust deed orrules constituting or relating to any pension scheme or provident or superannuation fund of which persons employed by the Government Owned Enterprises provided in the Second Schedule are members shall,on and after the commencement date,be construed andhave effectasif the - same were a reference to the respective Company but so Legal proceedings. Employees and pension schemes. that, for the purpose of ascertaining and calculating any right to benefits under such scheme or fund,service with the Government Owned Enterprises provided in the Second Schedule up to the commencement date shall be taken into account as if it were service with the respective Company. - (3) The operation of any of the provisions of this section shall not of itselfgiverise to a claim by anyperson to benefit under any scheme or fund referred to in subsection (2). 2. 7.On and after the commencement date, all documents,records and admissions which would,before the commencement date,have been evidence in respect of any matter for or against the Government Owned Enterprises provided in the Third Schedule shallbe admissible in evidence for or against the Company. 3. 8.Notwithstanding the provisions of any other written law,no corporation or other tax,no stamp or other duty and no registration fee,filing fee,reinsurance licence fee or any other fee, shall be charged or become payable on account of any transfer or vesting of any property effected by this Act or on account of anything done under paragraph 9. 9. A public officer having the power or duty to effect or amend any entry in any register relating to property,or to issue or amend any certificate or other document effecting or evidencing title to property shall,upon request made by or on behalf of the respective Company or the owner of such property,and without making any charge or receiving any fee or other payment therefore, do all such things as are by law necessary to complete the transfer of any property effected by this Act 5. 10.(1)Apersonwhoimmediatelybefore the commencement of the Act held the office of Chairperson of a Board of a Government Owned Enterprise, appointed in accordance with the relevantlegislation,shall,subject to the provisions of this Act,serve as the Chairperson of the Board of the Government Owned Enterprise. 6. (2)Apersonwhoimmediately beforethe commencement of theActheld theoffice ofmember of a Evidenceofbooks, documents.etc. Exemptions of isles,uties,ec. Duties of public officers. Transition of Board Members and Staff. Board of a Government Owned Enterprise,appointed in accordance with the relevant legislation,shall,subject to the provisions of this Act,serve as a member of the Board of the Government Owned Enterprise. - (3)Apersonwhoimmediatelybefore the - commencement of the Act held the office of Chief Executive Officer of a Government Owned Enterprise, appointed in accordance with relevant legislation,shall subject to the provisions of this Act,serve as the Chief Executive Officer of the Government Owned Enterprise. - (4) A person who served as a member of staff of a Government Owned Enterprise shall,subject to the provisions of this Act,continue in office as a staff member of the Government Owned Enterprise. ## MEMORANDUMOFOBJECTSANDREASONS The principal object of this Bill is to provide for the establishment, control, governance, performance and ownership of Government Owned Enterprises and public service obligations in respect of Government Owned Enterprises. PART I of the Bill providesfor the preliminary provisions. - PART II of the Bill seeks to provide for the procedure and criteria for establishing a Government OwnedEnterprise.Clauses 7and 8provide forcommercial lprinciples and the procedure for establishinga Government Owned Enterprise while Clause 9provides for the attributes of a Government Owned Enterprise. - PART Ill of the Bill seeks to provide for the management ofa Government Owned Enterprise. Clause 10 of the Bill seeks to provide for theBoard ofAgovernment OwnedEnterprise.Further,clause 13provides for a selection panel and their functions. Clause 22 provides for the appointment of a Chief Executive Officer. Clause 26-34 further provides for the transition of state corporations established underspecificActsofParliament tocompanies. - PART IV of the Bill seeks to provide for the performance of a Government OwnedEnterprise.Clause26seeks toprovidefor a business plan based on the strategic plan of the Government Owned Enterprise. - Clause 27 of the Bill further provides forperformance management while Clause28 of theBillprovidesforperformance evaluation. - PART V of the Bill under clause 29 seeks to provide for public service obligations of the Government Owned Enterprises, Clause 30 seeks toprovide for proposals of PublicService Obligations and Clause31 seeks to stipulate enforcement ofPublic Service Obligations. - PART VI of the Bill seeks toprovide for reporting and disclosure. Clauses 32 and 33 provide for reporting and disclosure respectively and Clause34providesforfinancial transparency. - PART VII of the Bill provides for the power of the Cabinet Secretary to makeRegulationsfor the effective implementation of the Act. - PART VIlI of the Bill seeks to provide for general provisions and they include dissolution,mergers, funds of the Government Owned enterprisewhile Clauses 37,38and 39 seeks toprovide for thefinancial year, annual estimates and Clause 40 provides for transition and savings provisions. Statement on the delegation of legislative powers and limitation of fundamental rights and freedoms The Bill delegates legislative powers, but it does not limit fundamental rights and freedoms. ## Statement on whether the Bill concerns County Governments Paragraph 33 of Part 1 of the Fourth Schedule to the Constitution provides that public investments is a function of the National government. In view of this,the Bill doesnot concern the County Governments in terms of Article 1i0 (l)(a)of the Constitution as it does not affect the functionsandpowers of County Governments. Statement on whether the Bill is a money Bill within the meaning of Article 114 of the Constitution The enactment of this Bill may occasion additional expenditure of publicfunds. Dated the 16th July,2025. KIMANIICHUNG'WAH, Leader of theMajority Party.