CDC undertook the study in collaboration with IDC of France. The study of Settlement of government of Kenya cross debts and other indebtedness with the PEs and between the PEs themselves was the second study which was an implementation of the recommendations for the previous study we had undertaken in 1995 on cross debt analysis covering about 52 government public enterprises (Pes). The key features of the study were:

• As indicated above the study was a follow-up to a previous study we had done earlier on assessment of the debt between the government and parastatals. Out of the previous over 50 PEs we had done debt assessment the 20 most indebted were included for debt settlement.
• We audited the 20 PEs so as to verify the debt claims. In undertaking the audit, we also reviewed their operational and financial systems so as to establish possible methods of debt settlement.
• We further developed cashflow projections to determine the ability of the organization to meet its future debt commitments based on its operations.
• Developed debt settlement policies including agreement of mutual debts, washout transactions and possible debt forgiveness proposals including conversion to equity.
• We also developed debt prevention policies and the debt restructuring proposals based on operational restructuring to maintain positive cashflow.
• Assisted the government on settlement negotiations between the government and the parastatals. These settlements have been done and we are now awaiting implementation of the debt prevention proposals.