PROFITS DWINDLE

Senate to probe Kenya Power's finances

Lawmakers are concerned by information that the electricity distributor could be broke

In Summary

• Speaker Kenneth Lusaka has approved a statement by Nominated Senator Abshiro Halake seeking the House to inquire into the financial crisis at the company. 

• Kenya Power collects about Sh13 billion a year in revenues and the lawmakers are concerned by information that it could be broke.

Kenya Power workers replacing vandalised transformers in Kitale.
AT WORK: Kenya Power workers replacing vandalised transformers in Kitale.
Image: NICHOLAS WAMALWA

A probe into the financial status of the Kenya Power will be among the first tasks the Senate will deal with when sittings resume next week. 

Speaker Kenneth Lusaka has approved a statement by Nominated Senator Abshiro Halake petitioning the House to inquire into the financial crisis at the company. 

Kenya Power collects about Sh13 billion a year in revenues and the lawmakers are concerned by information that it could be broke. 

The Senate took a two-week break until March 31 as a precaution to contain the spread of coronavirus.

Kenya confirmed nine more patients Tuesday, bringing the total number of cases to 25. At least three MPs who recently jetted back into the country from trips abroad are in self-quarantine.

The probe to be conducted by the Energy Committee chaired by Nyeri Senator Ephraim Maina will establish the firm's profitability over the last three years.

“The committee should state the current liability of KPLC to its creditors and suppliers and whether the company can meet its debt obligations on the schedule from its revenues,” reads the statement.

According to the company’s financial statement for the year ended June 2019, the firm is technically insolvent as its current liabilities have surpassed its assets.

The statements show that KPLC, a monopoly, only recorded a Sh262 million net profit out of Sh133 billion revenues.

This was a 92 per cent drop in the net profit from Sh3.2 billion the company posted over a similar period the year before.

The downward trend in profits has seen the company remain in a negative cash position of Sh5 billion for the second year.

The crisis has been compounded by a loss of 20 per cent of power through the system against the allowable 14.9 per cent by the energy regulator, translating to about Sh600 million in lost revenue.

“The committee should explain the cause of the low revenue generation by the company despite being a monopoly in the distribution of electricity in the country,” Halake said.

The senator wants the committee to establish if any measures have been put in place to contain the downward spiral of the power company.  

 

(edited by o. owino)