Kenya Pipeline in a spot over Sh4.3b bad debt

Parliament has queried Kenya Pipeline for declaring as bad debt some Sh4.3 billion it was ordered to pay an oil marketer before the matter is concluded in court.

The National Assembly’s Public Investment Committee (PIC) protested that the case, which has been dragging on for nine years now might cost the taxpayers billions of shillings

Yesterday, the committee grilled KP’s acting Chief Executive Hudson Andambi on why the company had made provision of the Sh4.3 billion in its budget as bad debt yet the case was still pending at the Court of Appeal.

According to the committee, making such provisions was tantamount to admitting that KP would lose the case.

The MPs took Andambi to task to explain the budgetary provision after the matter was flagged by the auditor general.

The power firm was in December 2010 ordered by an arbitration tribunal to pay an oil dealer Sh4.3 billion for breach of an agreement by allowing the Triton Petroleum to use its Kipevu facility.

The firm lodged an appeal against the arbitrator’s decision and the determination of the case is still pending.

Mr Andambitold the MPs the company was not opposed to settle the matter out-of-court and that setting the provision for a bad debt was an accounting practice

Meanwhile, a police officer, and two employees of the Kenya Pipeline Company (KPC) found guilty of stealing 33,000 litres of refined petrol valued at Sh3.4 million have been jailed for 12 years.

Antony Maina, Section 6 KPC sub-station manager, Michael Mutisya (KPC employee) and Antony Wekesa, a police sergeant asigned to the sub-station were sentenced by a Makueni court.