* Government to consult on law on special tribunal

* Six new dams to be built to reduce rain dependence

By Wangui Kanina

NAIROBI, April 21 (Reuters) - Kenya's parliament began a new session on Tuesday as the shaky ruling coalition government faced rising public criticism of squabbling among parties while the country grapples with a host of urgent problems.

The unity government was formed a year ago to end post-election violence that hurt east Africa's biggest economy badly and dented trade and growth across the region.

President Mwai Kibaki and his former rival Prime Minister Raila Odinga are struggling to restain members of their parties, whose salvos at each other have become increasingly ugly and anger ordinary Kenyans.

"Survey after survey has shows that the public is losing faith in the Grand Coalition government and its principal leaders," political commentator Macharia Gaitho said.

"The principal leaders have demonstrated that they are more interested in scrambling over the spoils than in working on the programmes vital to save this country from the fire next time."

The wrangling has business leaders anxious that political instability could cause more damage to the economy than the global economic crisis.

A survey this month of 187 CEOs and business leaders from Kenya, Uganda, Tanzania and Rwanda showed 30 percent were worried about politics in the long term, while only 8 percent mentioned the word slump.

SQUABBLING

Odinga's Orange Democratic Party (ODM) complains that Kibaki does not consult the Prime Minister when making major policy decisions, and that his Party of National Unity (PNU) has been reneging on the agreement signed to end the bloodshed last year.

ODM wants the power to appoint senior civil servants. Last week, a meeting to reconcile Kibaki's and Odinga's camps collapsed in acrimony.

Former justice minister Martha Karua, once a key ally of Kibaki, quit in disgust over stalled political reforms.

Kibaki told parliament the government would consult widely to reformulate a law for the establishment of a special tribunal to try the perpetrators of the post-election violence.

Some 1,300 people were killed and hundreds of thousands were displaced in the fighting.

A bill to institute the special court failed to pass in the last parliamentary session, with many legislators saying they did not trust the country's judicial system.

"Issues of land ownership and use, poverty, equitable development, unemployment, and food security are (also) a matter of urgency," Kibaki said.

He said the government also planned to build six dams to reduce dependence on rain-fed agriculture and to provide a lasting solution to the nation's perennial food shortages.

The government estimates 10 million people are threatened with famine because of crop failure. (Editing by Andrew Roche)

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