Mega graft scandals choke Energy docket

Energy Ministry Cabinet Secretary Charles Keter.

Parastatals in the Energy ministry have been turned into looters' paradise where managers continue to loot billions of shillings from the taxpayers.

Outgoing Kenya Pipeline Company (KPC) boss Joe Sang and four other managers are now the latest executives in the Energy ministry set to face graft related charges as the Directorate of Criminal Investigations (DCI) tightens his noose around parastatals under the Energy ministry.

Other suspects arrested are KPC's company secretary Gloria Khafafa, procurement head Vincent Cheruiyot, procurement manager Nicholas Gitobu and general manager in charge of infrastructure Billy Aseka.

KPC has been in the eye of a storm in recent months after more than five scandals rocked the entity.

From the Sh2.5 billion oil spillage scandal where millions of litres of oil disappeared in the pipeline system to the Sh4.4 billion price variation of the cost of building the 450km pipeline from Mombasa to Nairobi due to delays. The contract was being done by a Zakhem International Construction, a Lebanese firm.

The firm is also facing corruption-related investigations over the Sh1.8 billion oil jetty in Kisumu.

In October, the DCI boss George Kinoti summoned Sang, board director John Ngumi and five other officials to record statements over the oil jetty scandal. 

KPC is also dogged by controversies involving inflation of contracts estimated to be between Sh70 billion to Sh95 billion.

Besides KPC, the Kenya Electricity Transmission Company Limited (Ketraco), another parastatal in the Energy ministry, also has a fair share of scandals on its head.

The firm’s internal auditors put the amount of money lost at more than Sh6.3 billion.

Variations of contracts

For instance, one of the contractors at Ketraco claimed idling fees for 21 months for his workforce and equipment at a rate of Sh108 million per month for doing nothing. Some expatriates were being paid Sh200,000 per day. These led to a Sh3.8 billion bill slapped on the taxpayer.

The same 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. 

Kenya Power has had its fair share of scandals that saw almost the entire management arrested and suspended. Its waterloo was the procurement of defective transformers and the irregularities in pre-qualifying 525 companies for labour and transport contracts. The deals are estimated to be worth more than Sh4.5 billion.

In May, Kenya Power fired some 18 employees who were linked in the irregular pre-qualification of 350 companies in the labour and transport tender, a revelation that was made in an audit report.

Kenya Power is also facing a poles scam. Through price-fixing, reserving bids, restricting players and collusion with senior officials,  a group comprising about 40 treatment plants spread across the country has completely ring-fenced the contracts, supplying poles at approximately twice their market value.

Its latest controversy is how it was used by the government to play politics during last year’s election, delaying charging of correct bills to keep cost of electricity low, only to slap the inflated bills on the consumers after the election was over.

Geothermal Development Company (GDC) has also not been free of scandal. Six managers at GDC were also sent home for inflating rig moving charges at the parastatal.

GDC has also come under attention of the Auditor General for terminating a contract, an action that had exposed the taxpayer to the loss of Sh3.3 billion in compensation.

Bonfide Clearing and Forwarding Limited went to court seeking the monies as compensation for work done, loss of business and damages.

Another big project in the ministry was the Lake Turkana Wind Power (LTWP). Despite slapping taxpayers with penalties of over Sh5 billion for delays in building the evacuation line, when the time for them to deliver came, they failed to rise to the occasion.

The firm could only feed less then 40MW against the 310MW that was expected to start feeding when the line was made available.

The Energy Regulatory Commission may now be asked to feed power to the grid for free to compensate for the time it has not been injecting the agreed amount of electricity from the wind farm despite availability of the transmission line.

These scandals raise questions on the qualities of appointees in the Energy ministry under Cabinet Secretary Charles Keter.