Kenyans to pay more for delayed power projects - Beaking Kenya News

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Thursday, 15 August 2019

Kenyans to pay more for delayed power projects

Workers connect high voltage power lines at Voi in Taita Taveta
By DAVID MWERE
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Kenyans might be forced to pay billions of shillings for electricity transmission since the Kenya Electricity Transmission Company (Ketraco) is having trouble completing its projects on time.

The extra charge constitutes the contract cost variation — increased prices of materials — brought about by delays in completing the projects, or breach of agreements where Ketraco has terminated contracts

POOR PLANNING

A huge proportion of the billions invested in the projects is in form of commercial loans procured from development partners.

Wayleave compensation, which has greatly contributed to the delays, is another issue Ketraco Managing Director Fernandes Barasa and his team are grappling with.

The electricity transmission firm has Sh4.59 billion in pending wayleave compensation bills, which is likely to go up as the cost of land can only go up.


An audit report by Auditor-General Edward Ouko currently before the National Assembly has flagged a number of issues that, if not addressed, could see the taxpayer continue to suffer as a result of poor planning.

For instance, the completion of Sh10.5 billion Nairobi Ring project was behind schedule as at June 30, 2018. It was launched in May 2012 and should have been completed in November 2014.

The project entails the construction of a transmission line from Suswa to Isinya, with five substations in Suswa, Kimuka, Isinya, Athi River and Komarock. But only the Suswa and Isinya substations have been completed.

The Sh7.203 billion Nyahururu-Nanyuki, Lessos-Kabarnet, Olkaria-Narok and Wote-Kitui-Mwingi transmission lines were to be completed in December 2017 but fell behind schedule after the contract was terminated.

MITIGATION MEASURES

Kenya got a loan from the Exim Bank of India to fund two transmission lines and six substations that have dragged for years. They include the Sh1.23 billion Turkwel-Ortum-Kitale line, which is under construction by KEC International Limited. The line was scheduled for completion by August, 2015, but only 89 per cent of the work was done as at June 30, 2018.

The company was also supposed to build two substations in Kitale and Ortum worth Sh1.877 billion. They were scheduled for completion by December 2017 but were 70 per cent done as of June last year.

“It is not clear why these risks were not identified at the project planning stage and mitigation measures taken to eliminate or minimise their adverse impacts on project completion,” the audit report says.

Turkana South MP James Lomenen accused Mr Barasa of colluding with contractors to fake hostilities in Turkana to delay the projects and have the costs varied upwards.

   

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