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Rein in graft at Kenya Power – Business Daily

Kenya Power workers carry out repair works along Haile Selassie Road, Mombasa on December 5, 2020. PHOTO | KEVIN ODIT | NMG
With a new administration, it seems to me that we are going to learn big lessons about the impact of change of government on policymaking in the electricity sector. For what shapes policymaking in this sector is not just political will. It is about inter-elite relations and the play of informal power. With the regime change, some of the pertinent questions that arise are the following:
Will the new administration of President William Ruto maintain the momentum of the fight against corruption and reform at Kenya Power that started in earnest nearly one year ago with the launch of thoroughgoing forensic audits on the company’s critical operations and systems?
Will Kenya Power manage to successfully deliver the internationally competitive tender to procure quality and world-class transformers, meters and cables that has been ongoing for months — and where the company has been forced to fight a protracted rear-guard battle with a group of politically-influential local suppliers?
These are powerful local contractors that had through a formal cartel known as the Energy Suppliers Association dominated the supplies of critical inputs for 10 years. The stakes in the current dispute are high indeed because what is on the table is a massive procurement process with an estimated value of Sh5 billion.
Weeks before President Ruto was inaugurated, well-known supporters of the ruling party went to social media to warn the company against proceeding to award the coveted and lucrative contract until the new government is sworn in.
From what I gather, the procurement process is at advanced stages and initial agreements have been contracted. But insiders told me this week that the management has come under intense pressure to halt the process. Kenya Power engineers will be the first to tell you that the company has the fourth-highest transformer failure rates in the World.
In getting to the bottom of Kenya Power’s problem, the game-changer must be the eagerly-awaited results of the forensic audits on the company’s operations and systems. On Wednesday, I contacted Auditor General Nancy Gathungu to find out why the forensic audits are yet to be concluded nearly six months later. I informed her that I wanted to know the outcome of the audits because the revelations are going to be critical to the war on corruption and the return of Kenya Power to a healthy balance sheet. She replied that she was not in a position to comment on the matter because the audits were yet to be completed.
As taxpayers, we must all start pressing the Auditor-General to publish the results of the forensic audits and insist that all findings of the audits be made public.
We need to know why the company has been keeping billions of shillings in obsolete stocks, and whether it has been getting value for money from goods procured. We want to see the full results and outcome of the deep investigation and forensic audit on the procurement of heavy fuel oil.
A detailed forensic audit of the legal agreements with Independent Power Producers (IPPs) will also be critical. How do the terms and conditions at which we contract IPPs compare with similar contracts in the rest of the World? Is it the case that we have the fourth-highest transformer failures in the world? Why are incidents where electricity poles are falling and killing innocent people becoming frequent? Is the firm buying good-quality poles? Ms Gathungu must provide answers.
Another important pending issue is the hiring of a substantive CEO. Last year, the board set very high standards by advertising the job in the international media. From what I gather, the recruitment process ended up with the selection of three names that were consequently handed to the Ministry of Energy for appointment. The ministry refused to act on the names because all three names were foreigners.
Does it surprise that the Ministry of Energy found the prospect of a foreign Kenya Power CEO unpalatable?
The anti-expatriate sentiment not only smacks vicious parochialism but may end up hurting the interests of our nationals seeking jobs in international markets.
The writer is the former managing editor of The EastAfrican newspaper.




Finance specialist with courses ranging from corporate finance, perfonal finance and startup finance. Msc. Acturail Science, Bsc. Finance, COP Insurance and phD. Business Advministration -FInance(ongoing)