Power transmission firm fights Sh6.3b scam report

NAIROBI, KENYA: The Kenya Electricity Transmission Company (KETRACO) has bought space in local dailies to set record straight on Sh6.3 billion scam involving payments to individuals for no work

The Standard on Sunday reported that the State body could have lost Sh6.3 billion through fictitious claims, illegal price escalations and in essence paying hundreds of millions of shillings to companies and individuals for doing nothing.

The report puts the firm among State bodies to be involved in scandal worth billions of shillings in taxpayers’ money. The National Youth Service (NYS), Kenya Power and the Kenya Pipeline Company (KPC) are fighting graft claims which has seen number of staff being investigated.

Key areas linked to the KETRACO scam and which the company responded to on Monday include unclear payment of Sh35.6million, payment for fraudulent titles in Kiambu amounting to Sh26.8 million, violation of public procurement and disposal act 2015 and doubling of payroll with 115 new unplanned staff.

The reporting on an audit says the firm allowed a contractor to keep 100 per cent of its staff, even when the project had been stopped for 54 months after landowners blocked it, instead of just keeping a skeleton staff until matters had been resolved.

There were also additional claims due to the contractor’s overheads during the delay. Auditors also flagged variations of contracts whose prices had been set beyond the 20 per cent variation limit stipulated by procurement law. One of the projects was varied by up to 86 per cent, resulting in additional charges of Sh430 million. The report also found outstanding way-leave compensation amounting to Sh726 million, with another unclear payment of Sh35.6 million made to a landowner in Kajiado.

In some of the responses, KETRACO says it has not exceeded the approved staff establishment. “The recruitment of operations and maintenance staff was planned for and informed by the takeover of the operations and maintenance function as strategic plan,” says advertisement signed by KETRACO’s Corporate Communication Department adding that it was duly funded under operations and maintenance budget.

KETRACO also alleges that it encountered suspicious cases of title deeds submitted by some landowners within Kiambu County along Suswa-Isinya transmission line which was reported to Ethics and Anti-Corruption Commission and DCI for investigation.

It says the acquisition of wayleave for the transmission line in question posed a challenge as the landowners demanded exorbitant amounts with some demanding 100 percent compensation for the limited loss of use of land before allowing the contractor to undertake the works, resulting in intermittent stoppage for the contractor.

The audit report found outstanding way-leave compensation amounting to Sh726 million, with another unclear payment of Sh35.6 million made to a landowner in Kajiado.

There was also an inflated land compensation payment of Sh72 million to a software firm.

The transmission line traverses the parcel owned by a software company which KETRACO says declined access to the contractor. “The cost of rerouting was evaluated at Sh210 million. A valuation of of Sh80 million was returned by an independent professional valuer and compensation negotiated to final figure of Sh72m that was paid registration of the easement.”

Reached for comment, Ketraco said some of the matters may end up in court and it may not be appropriate to comment. Some of the management’s responses on the findings are captured in the audit report.