Kenya Power has suspended 59 senior staff in its supply chain division to pave way for a forensic audit into their dealings and the company’s procurement systems.
The division led by supply chain and logistics manager John Ng'eno has been temporarily shown the door days after being placed at the centre of reforms targeted to rid the company of sleaze.
In a statement, Kenya Power said suspension of the team is the start of reforms recommended by a Presidential taskforce to streamline its operations and lower the cost of electricity.
“The goal of the forensic audit, which will be done on the procurement systems, stock and staff, is to enhance the robustness of the company’s supply chain processes so as to anchor them on the principles of value for money, professionalism and accountability,” the company said.
The company announced that a team has been picked to temporarily take charge of the division's operations as the audit is conducted.
"Among the recommendations that were made by the Taskforce was a review of Power Purchase Agreements (PPAs) in order to lower the cost of purchasing power from Independent Power Producers (IPPs) with the aim of securing the sector’s sustainability," Kenya Power said.
Procurement on the spot
The John Ngumi-led Presidential taskforce put the procurement division on the spot for dealings allegedly mired in corruption claims.
It observed that the division had bought a substandard metering equipment and transformers that have seen the company hold dead stock amounting to over Sh5 billion, with most of the equipment now obsolete.
The taskforce noted that the company’s ambitious programme to connect the entire country to the national power grid saw it increase outsourcing of construction projects and unfettered purchase of goods — including meters, poles and transformers of questionable quality — from unqualified and unregistered firms.
The taskforce recommended that Kenya Power replace all the staff in the procurement department.
Before the fresh hiring is done, the taskforce called for outsourcing of an interim procurement team from other government agencies with “demonstrated experience in procurement of certain high quality engineering equipment and machinery”.
It also proposed that the company’s board be directly in charge of procurement by approving procurement policy, especially on strategic procurement items and their specifications, and also having the final say on the process, including the signing of PPAs.
“Kenya Power to… engage appropriate expertise on management of obsolete assets and undertake maintenance of (its) distinct parts for engineering equipment and supplies already procured,” the taskforce said.
It also recommended that Kenya Power adopt a framework agreement on procurement for fast moving consumable goods and equipment to manage the company’s liquidity and also prevent the holding of large stocks that could be prone to deterioration and theft.
The taskforce proposed implementation of end-to-end enterprise resource management systems to manage procurement, warehousing and storekeeping functions and introduction of a contract management framework.
The taskforce also recommended Kenya Power to introduce a shift system for its workforce and reduce their numbers.
Also proposed was vetting of the staff to assess their competencies, qualifications and integrity, and enforce wealth declarations to verify unexplained wealth.
The firm did not disclose the duration of the forensic audit on the procurement team, a process expected to be periodically rolled to cover all other departments and its 10,000-person workforce.
A steering committee has been formed by President Uhuru Kenyatta to fast track implementation of this reforms with the aim of cutting electricity prices by up to a third before the end of the year.