• Lawmakers demand answers on why the firm was granted rights to conduct feasibility study prior to licensing.
• LTWP managers say there is no requirement for approvals for one to conduct feasibility studies.
Image: JACK OWUOR
MPs have questioned an overpayment of Sh789 million in 2020 to the Lake Turkana Wind Power for energy not consumed by taxpayers.
The payment followed delays in the construction of the transmission station to evacuate power from the 40,000-acre Loyalangalani wind farm in Marsabit county.
Whereas what was due to the investor was 39,023,703 Euros (Sh4.9 billion in 2021), the government paid 45,197,003 Euros (Sh5.7 billion in 2021) hence the excess of 6,173,296 Euros (Sh789 million in 2021).
The National Assembly Public Investments Committee on Wednesday began a probe into why it has taken long for the firm to refund the cash.
MPs also raised concerns that the money could be accruing interest, which they believe may benefit government officials in the energy sector.
Lawmakers said it was inexplicable that Lake Turkana Wind Power has not wired the money despite getting details of the account to remit the funds.
PIC chairman Abdulswamad Nassir questioned why the Ministry of Energy and KPLC took one year to provide details of the account where Lake Turkana Wind Power was to send the money.
“Is there an individual at the Ministry of Energy or Kenya Power who did not want the money paid and why? Was the money held in your account or operations?” Nassir asked.
“Why can’t you refund the money through the same bank account that you received it from? It doesn’t matter whether it is KPLC or the government,” Mandera East MP Omar Mohamed said.
Appearing before the committee, LTWP CEO Phylip Leferink and adviser Rizwan Fazal said it was the government that delayed providing the bank details for the transaction.
The LTWP managers said they were willing to pay back the money but did not get the account details until a month ago.
“We were uncomfortable wiring the money to Kenya Power but wanted to deposit the money in the accounts linked to the Consolidated Fund at Central Bank,” Fazal said.
He said LTWP notified the government of the excess and requested that it be provided with the bank details which were only provided on November 8.
Fazal said, “At the time of refund calculation, KPLC requested the cash but we asked for bank details to send money to the Consolidated Fund.”
The PIC is reviewing a special audit report that queried how the Energy ministry granted the private investor exclusive rights to survey the project area before the lease agreement.
“The special audit noted that the ministry did not conduct competitive bidding in the identification of the private investor contrary to the law,” the report of the audit done by deputy auditor general Fredrick Odhiambo reads.
The PIC chairman said the committee will invite Kenya Power and Energy ministry to shed more light on the queries.
Also among the issues MPs are probing is whether there was conflict of interest on the part of government officials who were linked to the project.
Former Vision 2030 CEO Mugo Kibati’s name was also dragged in the inquiry on the role he played in handing the company's multi-billion shilling tender.
Documents the committee is reviewing indicate that Kibati is a chairman of the company’s board. He was director-general of Vision 2030 Secretariat from 2009 and 2013.
MPs are seeking to establish whether there was a conflict of interest on his part on suspicion it was the same time LTWP was incorporated as a Vision 2030 flagship project.
But Fazal said, “Kibati was not the chairman at the inception of the project. He was named chairman in 2014 after he had left Vision 2030. He has zero shareholdings. He is a non-executive chairperson.”
MPs further questioned the basis for the payments by the government in the absence of invoices to back up the claim from the contractor.
Tinderet MP Julius Melly said, “There is no entity where someone pays you based on a contract. You must invoice. Furnish the committee with the invoices to the government.”
Wajir East MP Rashid Amin said, “All payments were done for services and power which was not delivered.”
But Fazal said the contract agreement provided that the government was to pay for deemed generated energy.
Also queried is why the company has changed hands almost four times and who were the original shareholders, as well as who signed the lease agreement with Marsabit county council.
The company was initially called 580, then changed to Abraasa and then to Turkana Wind Power.
(Edited by Bilha Makokha)