MPs probe Sh784m overpayment to Lake Turkana Wind Power

Parliament has opened investigations into the overpayment of Sh784 million to Lake Turkana Wind Power for the project in Marsabit County.

The payments for the multi-billion-shillings project were made in four tranches from June to September, last year, but the firm’s directors yesterday told MPs they have waited for one year for bank account details to deposit the refund to the Kenya government. 

However, the MPs suspect collusion with Energy ministry and Kenya Power officials who could be pocketing interest earned on the cash, if it all the money is still available. 

The company that implemented the Wind Farm located in Loiyangalani was supposed to be paid 39.826 million Euros but it received 45 million Euros.

“At the calculation date, Lake Turkana Wind Power (LTWP) did the calculation and established that there was an excess payment of 6,173,296 Euros refundable to government of Kenya,” the firm disclosed in documents tabled yesterday before the National Assembly’s Public Investments Committee (PIC).  

As at yesterday, the exchange rate for the Euro at the Central Bank of Kenya website was Sh127.0753, which means the company received Sh784,473,441 more.

PIC yesterday began the probe into the overpayment, citing massive conflict of interest on the part of government officials who were linked to the project that comprises 365 wind turbines each with a capacity of 850kW and a high voltage substation. 

The committee chaired by Mvita MP Abdulswamad Nassir wants to establish who authorised the excess payments and why the company has refused to refund the money to Kenya Power one year later. 

Excess payment

In a meeting with Lake Turkana Wind Power directors Phylip Leferink and Rizwan Fazal, the MPs also raised concerns that the money could be accruing interest which they believe may benefit government officials in the energy sector.

MPs questioned the directors on why they have not wired the money despite getting details of the account to deposit the cash. 

Mr Nassir questioned why it took the Ministry of Energy and the management of KPLC one year to provide details of the account to deposit the refund.

“Is there an individual at the Ministry of Energy or Kenya Power who did not want the money paid and why? Was it held in your account or operations?” Mr Nassir asked.

He said the committee will summon Kenya Power and Energy ministry officials over the issue. 

“Why can’t you refund the money through the same bank account that you received it? It doesn’t matter whether it is KPLC paying or the government. The money came from the same entity,” added Mandera East MP Omar Mohamed said.

In their defense, Fazal said they were willing to refund the cash but did not get the account details until a month ago.

“We have not refused to pay back the excess money we received but we have been asking for the account to deposit the cash because we were uncomfortable wiring the money to Kenya Power. We wanted to deposit the money in the accounts linked to the Consolidated Fund at Central Bank,” Mr Fazal said.

Competitive bidding

Mr Fazal told MPs when the company realised the excess payment, they immediately asked for bank details to make the refund to the Consolidated Fund.

The account details were only provided on November 8, 2021, he added. 

“It is only about four weeks ago that LWTP received a letter from KPLC. We chose to pay the government at the Central Bank,” Mr Fazal said.

A special audit report done by deputy auditor general Fredrick Odhiambo revealed that the lease agreement was given to the Lake Turkana Wind Power before the company was incorporated.

The report further queried how the Energy ministry granted the private investor exclusive rights to survey the project area before the lease agreement.

“The special audit noted that the ministry did not conduct competitive bidding in the identification of the private investor contrary to the law,” the report reads.

MPs further questioned the basis for the payments by the government in the absence of invoices to back up the claim from the contractor.

Tinderet MP Julius Melly said: “There is no entity where someone pays you based on a contract. You must invoice. Furnish the committee with the invoices to government.”

Multibillion shilling tender

“All payments were done for services and power which was not delivered,” Wajir East MP Rashid Amin said. 

But Fazal said the contract agreement provided that the government was to pay for energy deemed generated.

During the session, the name of former Vision 2030 CEO Mugo Kibati was also dragged in the inquiry with regard to his role in handing the company the multibillion shilling tender.

Documents the committee is reviewing indicate that Mr Kibati is a chairman of the company’s board.

He was director general for Vision 2030 secretariat from 2009 and 2013.

MPs are seeking to establish whether there was a conflict of interest on his part as this was the same time LTWP was incorporated as a Vision 2030 flagship project.

“Kibati was not the chairman at the inception of the project. He was named chairman in 2014 after he had left Vision 2030. He has zero shareholding. He is a non-executive chairperson,” Fazal explained. 

The firm’s directors were pressed to explain how the country has benefited from the Sh86 billion project commissioned by President Uhuru Kenyatta in 2017.

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