• House team wants the Sh3.1 billion recurrent budget be broken down.
• Queries emerge of mysterious Sh25 billion oil marketers pending bill not in budget
Lawmakers have called out energy regulator EPRA for paying its staff hefty salaries, saying the recurrent budget for the entity is worrying.
The Energy and Petroleum Regulatory Authority raised eyebrows after asking MPs to approve Sh1.1 billion for personnel emoluments out of its Sh3.1 billion budget.
The National Assembly Energy Committee members have however pointed out that the amount is too huge considering the size of the authority.
The committee chaired by Mwala MP Vincent Musau said the amount is unacceptable since the authority is budgeting with only Sh117 million for development.
EPRA has 157 employees and says it would recruit 61 more in the next financial year should the budget proposal get the MPs' approval.
But MPs held the big budget doesn’t speak to the size of the energy regulator, “especially when compared against its development budget of Sh100 million.”
“Your recurrent expenditure is worrying. When we have an organisation with a development budget of Sh100 million and a recurrent budget of Sh3 billion, doesn’t it worry you?” Musau asked.
The Energy committee chairman added, “We are a bit worried. This raises fundamental questions on how we are using this kind of recurrent expenditure. The size of the organisation doesn’t speak for this level of expenditure.”
Part of the recurrent figures MPs are uncomfortable with are Sh465 million EPRA has sought for administrative expenses, Sh622 million for goods and services, and Sh471 million for contracted services.
Requests for depreciation (Sh123 million), insurance and medical cover (Sh101 million), board of directors costs (Sh30 million), and Sh18 million for repairs and maintenance top the list.
Dr John Mutua, EPRA director of Economic Regulation, defended the request, saying the authority hires specially qualified personnel.
“The nature of staff we have include engineers, lawyers, fiscal economists and strategists who hold a masters degree and above. The cadre is paid at those rates,” he said.
At the same time, MPs have flagged a mysterious Sh25 billion pending bill owed to oil marketing companies which the Petroleum department has not requested for in the budget.
Principal Secretary Mohamed Liban and officials of state agencies concerned with petroleum issues were hard pressed to explain why they had not factored the money in the budget.
“Looking at the budget, I don’t see a line around the strategy of settling these pending bills so that we start on a clean slate and allow market forces to shape oil prices,” Musau said.
“Where is the money the oil marketers are asking for? Where is it in the budget? Do you have information about what the plan is around the money?”
MPs wondered how the claim slapped on the regulator by oil marketing companies would be funded if not factored in the budget.
This was amid queries on why the money owed to OMCs had not reduced yet the National Treasury provided a chunk of the Sh63 billion bill – as was in December, to settle some of the bills.
“We need the correct information on the total amount paid to OMCs so far, the outstanding amount,” Musau said.
EPRA has also been reprimanded over a new budget request for feasibility study on the gas storage facility President William Ruto's administration seeks to put up at the Coast.
The concern is that a similar study had been done with lawmakers arguing it was not making economic sense for the authority to be allocated another Sh250 million for the same.
Among MPs present at the engagement were Walter Owino (Awendo), Tom Odege (Nyatike), Lemanken Aramat (Narok East, vice chair), Julius Mawathe (Embakasi South), Ken Chonga (Kilifi South), Geofrey Mulanya (Nambale), Augustine Kamande (Roysambu), Charles Gimose (Hamisi), and Victor Koech (Chepalungu).
On the feasibility study, the concern is that KenGen awarded a US firm the contract to assess the country’s capacity to generate natural gas.
“To what extent would it not amount to duplication? If the study happened, what became of it?” the MPs asked.
On the feasibility, the ministry said the cost is being shared with Tanzania as the study is being conducted jointly by the two countries.
“The MoU says that the two share the cost at 50 per cent,” the PS said, even as MPs demanded more details on the gaps the new study would fill.
“Can we justify what was done in the first instance? We are persuaded we could be out to get another contractor to do a bogus study,” the committee said.