Kenya Power rot finally unravels
Kenya Power spends more than 80 per cent of its revenue on buying power.
I blinked in the afternoon sun at the row upon row of transformers, like a droid army from Star Wars, at the Kenya Power yard on Likoni Road, Nairobi’s Industrial Area. I was with my colleague John Kamau running down the spoor of a story we had smelt earlier in the day. A carpet of detectives and investigators were poring over the stock, anxious store people in tow. Two questions clanked in my head: Why so many? Do they work?
We went on to do some reporting on Kenya Power and its leaking generators, including the investigations going on at the time and the subsequent prosecutions, some which are ongoing.
We were dismissed as a bunch of DCI sycophants who had allowed themselves to be used for a publicity stunt by the government, that there was really nothing wrong at Kenya Power, the officials were being victimised and that President Kenyatta was throwing up a smokescreen to hide an impending attack on allies of Deputy President William Ruto.
It has taken three years but, finally, the truth is seeping out from under the covers of government secrecy and parastatal corruption: We were right and the situation was a lot worse than we had reported.
A shame
Kenya Power is, quite frankly, a shame that saps your faith in our fellow citizens and their ability to manage national affairs, a loss-making monopoly, a smouldering ruin of what used to be a blue chip company. Reports are already wafting out about the presidential task force report on the company, particularly its procurement of electricity from independent power producers (IPPs).
The IPP idea had innocent roots. More than 20 years ago, a drought emptied the dams and Kenya went through one of its worst power rationing seasons. Production plummeted, the economy staggered and the population was on edge from hours of darkness. And so the idea was accepted that power producers could bring in generation equipment and generate power. Because the initial capital outlay was quite large, they were guaranteed long contracts and their power was pumped into the national grid even when there was cheaper, renewable power available. It was a tough but necessary compromise. Today, there are almost 100 IPPs and I’m told more than 100 others have applied to supply electricity to Kenya Power.
Dead in the water
Kenya Power spends more than 80 per cent of its revenue on buying power. Power from IPPs costs, on average, twice that from KenGen. Partly because of the prohibitive cost of power, Kenya is dead in the water in competition with Egypt, where a kilowatt hour of power costs 0.6 US cents (Sh60), Ethiopia 0.4 or South Africa 0.9 because here it costs 15 US cents, higher than even Tanzania. And, by the way, these are outdated figures from 2017 — but you get the picture.
But it is not just with the purchase of power that you have an issue. There’s that droid army that we saw a couple of years ago. Given its size and huge cash flow, Kenya Power can procure very competitively from the world market. It can also manufacture such simple things as transformers and electricity poles. But it does not — because of the imperative to facilitate corruption. So it buys junk — and, I suspect, used junk at that — at great cost so that suppliers can make money. And because the primary purpose of procurement is not serving the consumer but is kickback-driven, entities such as Kenya Power build an inventory of epic proportions; they buy for this year, next year and the year after.
The unfairest part of it, I suspect, is that the billing is not fair; I’m totally convinced, although I’ve no direct evidence, that you don’t always pay for what you have consumed. Between the estimates and the unreliable metres, there are many who could be paying more than they should.
And then there are the power thieves. And this is not a guy in the slum with an illegal connection. These are huge industrialists who spend hundreds of millions of shillings in power bills and for whom it makes a lot of financial sense to subvert the system and not pay their fair share.
So the Cabinet reshuffle the other day, where the Principal Secretary and his Cabinet Secretary were moved, is probably intended to clear the way for investigations and some further changes. But that is not enough. We have suffered the heavy load of bills and our economy has been blighted by this profiteering. All those folks guilty of wrongdoing should have the book thrown at them.
In this country, cheap politics, tribalism and corruption always carry the day. But sometimes, if you are lucky, the facts come out and you are proved right. In the case of Kenya Power, I’ve an idea who is going to have the last laugh.
