Wind turbines

Wind turbines at the Lake Turkana Wind Power project in Loiyangalani, Marsabit County,  on August 6, 2019.

| File | AFP

MPs smell a rat in the award of power line deal to a broke firm

What you need to know:

  • On August 14, 2017, Ketraco terminated the contract of M/s Isolux Ingenieria SA on grounds of bankruptcy.
  • The termination led to the delay of completion of the project, with the government being slapped with a Sh18.4 billion bill.

Members of Parliament have questioned the tendering process that led to a company being contracted to build an electricity transmission line but failing to deliver, thus leaving taxpayers with the burden of paying Sh10 billion for idle power.

The National Assembly Public Investments Committee (PIC) has questioned how Lake Turkana Wind Power (LTWP), which was the main contractor in generating power from the Loiyangalani wind firm, was also the same entity that recruited the firm to distribute power, which was later declared bankrupt, leading to the loss. M/s Isolux Ingenieria SA was contracted to build a transmission line to evacuate the power generated.

The Abdulswamad Nassir-led committee yesterday pointed out the move to bar the Kenya Electricity Transmission Company (Ketraco) and Kenya Power from the process of recruiting a company to build the transmission line was deliberate in order to get the money for idle power.

In a meeting with Ketraco management at Parliament Building in Nairobi yesterday, Mr Nassir wondered why LTWP settled on M/s Isolux Ingenieria SA yet a technical report on valuation placed a Spanish company, Elecnor, as having more technical capability to build the line. According to the technical valuation report tabled before the committee, Elecnor scored 75 percent while M/s Isolux Ingenieria SA got 59 percent.

Ketraco acting Managing Director Anthony Wamukota told PIC none of his staff was involved in picking M/s Isolux Ingenieria SA. Mr Wamukota said the technical valuation was conducted by a foreign company, Kema, which later handed its report to LTWP to make the final decision.

“According to the technical consultants, it is not a must that the company that scored higher is the one that should be given the job. Maybe they scored higher in one area but not in others,” Mr Wamukota said.

Termination of contract

On August 14, 2017, Ketraco terminated the contract of M/s Isolux Ingenieria SA on grounds of bankruptcy.

The firm filed a case in the High Court challenging the termination of the contract but the case was dismissed in favour of Ketraco. The company pocketed Sh83.54 million for the work it had done before termination of the contract.

The termination led to the delay of completion of the project, with the government being slapped with a Sh18.4 billion bill by LTWP for idle power between 2017 and September 2018.

The Sh10 billion was to be paid through taxes and Sh9.8 billion would be charged on consumers through a tariff review between June 2018 and May 2024. MPs now believe the choice of M/s Isolux Ingenieria SA was deliberate as LTWP knew they were going to fail. 

Kaloleni MP Paul Katana said those who made taxpayers to suffer must be brought to account. Embakasi East MP Babu Owino warned Mr Wamukota against withholding crucial information on who made the mistake.

A special audit on the LTWP project conducted by Deputy Auditor General Fredrick Odhiambo revealed that, while the company would charge Kenya Power for an incomplete transmission line, the government could not charge the company for delays in delivering on the project. The audit said payments for the idle power began without independent review.

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