A new audit has put Kenya Electricity Transmission Company Limited, Geothermal Development Company, and Rural Electrification Corporation managers on the spot with the revelations.
Auditor General Nancy Gathungu has cited huge pending bills, land disputes, donor funds lying idle, unsupported expenditures and installations wasting away.
The biggest risk is at GDC, where a Sh69 billion investment in steam wells is yet to be put to use eight years later.
An investment of Sh13 billion on the 50MW solar plant in Garissa by Rerec is equally in doubt following a land row.
Several multibillion-shilling ventures have also been flagged at Ketraco amid revelations the company’s accounts are managed manually using Excel sheets.
On the GDC project, three independent power producers who were to use the steam wells are yet to build power plants to evacuate energy from the wells.
At least 21 of the 52 wells GDC sank are productive but cannot be put to use after the failure by Independent Power Producers (IPPs) to meet their side of the bargain.
“The delayed implementation of the agreements signed in November 2014 has put at risk GDC's investment made of Sh69,055,342,000,” Gathungu said.
With the effective date set for the IPPs to take over the sites, the amount spent continues to attract interest yet the investment is earning no income.
The three firms are Sosian Menengai Geothermal Power Limited, Quantum Power East Africa and Orpower Twenty-Two Limited.
Sosian was to complete its power station in September 2021 but was still mobilising funds to start construction at the time of the audit early this year.
Quantum Power East Africa and Orpower Twenty-Two Limited had no work going on, Gathungu said in the report tabled in Parliament.
“The public did not obtain value for money on expenditure of Sh69,055,342,000 on development of steam wells and associated infrastructure,” she said.
On the Rerec case, a community trust group had instituted a legal suit against Rerec, seeking to be compensated for the 220 acres.
The group had rejected the compensation payout by Garissa county government, insisting it wanted to be paid directly by the company.
Rerec has further been queried over infractions at the Kenya Electricity Expansion project, where it is yet to utilise more than Sh856 million in donor cash.
The auditor has raised concerns that with more than 95 per cent of the project duration passed, the credit is set to lapse without being fully utilised.
The contracts were signed in June 2020 and were expected to be completed by June 2022. The project was set to close on December 31, 2022.
“The planned deliverables may not be realised. In the circumstances, the project objectives may not be achieved,” the Auditor General said.
Rerec also has issues at the Kenya Offgrid Solar Access Project for underserved counties having only withdrawn Sh110 million (3.1 per cent) of Sh3.5 billion.
For Ketraco, substations and high voltage transmission lines have stalled. The Ruto administration has said it is banking on them to reduce the cost of power.
Furthermore, the money has been lying idle in the bank without being utilised for project activities since it was withdrawn, attracting interest.
Gathungu said, “It boils down to inefficient utilisation of public resources. The project may not be completed as planned and the objectives may not be achieved.”
Among those cited are Olkaria, Narok, Lessos, Kabarnet, Nanyuki, Kabarnet, Nanyuki, Rumuruti, Kitui .Wote lines.
An electricity transmission improvement project that was due in April 2020 has run into headwinds after the contractor went broke.
Further, the funding from the African Development Bank was terminated when the main contractor was declared insolvent.
Gathungu said the project may not be completed within schedule, resulting in delayed provision of expected services to the stakeholders.
Details also show the government paid commitment fees and loan interest on idle bank balances of Sh606 million at the Nairobi Ring Transmission project.
Gathungu is further concerned Ketraco may not absorb Sh1.9 billion in respect of the Ethiopia Kenya Electricity Highway project which was started in 2019.
She said a review of project deliverables revealed that it was behind schedule despite the completion date being reviewed to December 2022.
“The project may not absorb all its funds with the limited time, denying citizens the benefits of the loan. Delays may result in escalation of project costs or expiry of funding by project financiers,” the auditor said.
The auditor also cast doubt Ketraco would utilise Sh25.2 billion which was yet to withdrawn for the Eastern Electricity Highway project at the time of the audit.
A substation, which was to boost supplies between Kenya and Tanzania, started in February has also stalled at 93 per cent. yet the project period has lapsed.
Ketraco explained that this was caused by delay in acquiring way leaves, long negotiation for land compensation and protracted legal cases.
“It is clear that delay in project implementation could lead to cost overruns and the project may not be able to utilise the available loan funding,” Gathungu said.
Ketraco is also yet to get out of the woods on the query of broke firms which have failed to deliver their contracts.
An Exim Bank of India funded project to build 220KV Turkwel-Ortum-Kitale substations started in April 2013 is at 73 per cent completion.
Liquidation orders were issued against the contractor in July 2018 by the courts in India.
Gathungu says the project remains doubtful much as Ketraco says it was looking for another contractor to take over the remaining works.
“The project may not be completed on time and may also experience cost overruns.”
For Ketraco, substations and high voltage transmission lines have stalled. The Ruto administration has said it is banking on them to reduce the cost of power.
The audit showed construction works are yet to commence at the main strategic substation in Turkwel.
Another project to interconnect Nile Equatorial Lakes countries was terminated at 61 per cent completion.
Worse, the loan between Kenya and the African Development Bank to finance the works expired in December 2017.
No funds have been received from the bank since 2016 and the loan has neither been renewed nor other funding sources identified.
“In the circumstances, it has not been possible to confirm whether or when the project will be completed," Gathungu said.
Taxpayers could be penalised Sh4.5 billion for the termination should Ketraco lose its appeal against a tribunal that awarded the damages to the contractor.
The loan already disbursed to the project continues to attract an un-quantified amount of interest yet the asset to enable repayments remains incomplete and unused.
“It is not possible to confirm if there is value for money obtained from the project,” Gathungu said.
Edited by EKibii
