Uhuru trains guns on en­ergy agen­cies amid ram­pant graft

KPC, Kenya Pipe­line, Na­tional Oil, Geo­ther­mal Devel­op­ment Com­pany among those hit

Daily Nation (Kenya) - - BUSINESS - BY BRIAN NGUGI

bn­[email protected]­tion­media.com

Re­cently, cor­rup­tion and the name of an en­ergy agency have been ap­pear­ing fre­quently on the same sen­tence. So, when Pres­i­dent Uhuru Keny­atta on Thurs­day said some rogue of­fi­cials had turned en­ergy paras­tatals into dens of cor­rup­tion, he was un­der­scor­ing what has been in the pub­lic do­main and grab­bing head­lines for a while now.

“We want help in ar­rest­ing all the rogue heads (of the agen­cies),” said Pres­i­dent Keny­atta on Thurs­day when he presided over the ground-break­ing cer­e­mony for the 83.3MW unit 6 of Olka­ria 1 Geo­ther­mal power plant in Naivasha, Nakuru County.

Sev­eral cash-rich State agen­cies un­der the En­ergy and Pe­tro­leum dock­ets are reel­ing from a se­ries of cor­rup­tion al­le­ga­tions. They in­clude Kenya Pipe­line, Na­tional Oil Cor­po­ra­tion of Kenya, Kenya Power, Geo­ther­mal Devel­op­ment Com­pany, and Ru­ral Elec­tri­fi­ca­tion Au­thor­ity (Rea).

For­mer and cur­rent of­fi­cials at the agen­cies are un­der in­ves­ti­ga­tion for var­i­ous cor­rup­tion re­lated in­ci­dents.

On Fri­day, En­ergy Cab­i­net Sec­re­tary Charles Keter re­it­er­ated the Pres­i­dent's mes­sage, say­ing any­one caught en­gag­ing in cor­rup­tion would carry their own cross. “All of them are aware of the law hence I ex­pect them to op­er­ate above board,” Mr Keter warned.

Ear­lier on Thurs­day, Pe­tro­leum CS John Mun­yes ad­mit­ted that there is sys­temic cor­rup­tion at Kenya Pipe­line, adding that it should be dealt with im­me­di­ately.

Mr Mun­yes said re­sults of a foren­sic au­dit and in­ves­ti­ga­tions be­ing car­ried out by the Direc­torate of Crim­i­nal In­ves­ti­ga­tions (DCI) and the Ethics and Anti-cor­rup­tion Com­mis­sion (EACC) hold the key to the truth and ac­tion would be taken against those found cul­pa­ble.

EACC in Au­gust sum­moned Rea board to shed light on a re­port they sub­mit­ted to Mr Keter im­pli­cat­ing some se­nior man­agers in cor­rup­tion. The board had writ­ten to EACC on Au­gust 10 con­cern­ing the per­for­mance of the man­age­ment in de­liv­er­ing key govern­ment flag­ship projects cost­ing bil­lions of shillings, af­ter the con­clu­sion of an au­dit that Mr Keter had com­mis­sioned.

The CS wanted a scru­tiny of the elec­tri­fi­ca­tion of pub­lic pri­mary schools and hu­man re­source ca­pac­ity at the au­thor­ity.

The au­dit sought to find out the sta­tus of the pro­gramme and why the man­age­ment had been is­su­ing in­con­sis­tent re­ports on it; why Rea-in­stalled transformers have been fail­ing; and the qual­ity man­age­ment stan­dards of Rea re­lat­ing to pro­cure­ment of ma­te­ri­als.

An­other agency that has been marred by al­le­ga­tions of fraud is Na­tional Oil. It re­cently emerged that fraud­u­lent con­trac­tors sup­plied 67,251 faulty gas cylin­ders, scut­tling a govern­ment plan to pro­vide poor homes with cheaper cook­ing fuel. More than a third of the liq­ue­fied pe­tro­leum gas cylin­ders sup­plied to Na­tional Oil were sub-stan­dard, in­clud­ing hav­ing faulty valves that posed the dan­ger of fire erup­tions.

Dis­counted price

Un­der the Sh3 bil­lion plan, dubbed the Mwananchi Gas Project, the house­holds were to re­ceive 6kg cook­ing gas cylin­ders and burn­ers at a dis­counted price of Sh2,000.

The mar­ket price for the 6kg gas cylin­der with cook­ing ac­ces­sories is about Sh5,000.

An in­ter­nal re­port pre­pared by Na­tional Oil, the State oil mar­keter, showed it re­jected 67,251 cylin­ders sup­plied by four lo­cal firms out of a to­tal of 353,000 sup­plied, cit­ing poor qual­ity.

The ten­der in the first phase of the gas plan was val­ued at over Sh700 mil­lion. The cheaper cook­ing gas plan is aimed at en­trench­ing the use of the com­mod­ity among low-in­come house­holds in or­der to cut re­liance on kerosene and char­coal, which are not en­vi­ron­ment-friendly.

Un­der the plan, which has al­ready been pi­loted in Machakos and Ka­ji­ado coun­ties, the En­ergy min­istry is ex­pected to buy about one mil­lion new cylin­ders for dis­tri­bu­tion.

The DCI an­nounced in Oc­to­ber the launch of in­ves­ti­ga­tions into how the fraud­u­lent con­trac­tors sup­plied 67,251 faulty gas.

Di­rec­tor of Crim­i­nal In­ves­ti­ga­tions George Kinoti said then he will lead a team of de­tec­tives to es­tab­lish how the Pe­tro­leum min­istry and the Na­tional Oil al­lowed the sup­ply of the sub-stan­dard cook­ing gas cylin­ders.

“We will ini­ti­ate a probe. We can­not al­low a pro­gramme funded by tax­pay­ers to put Kenyan ci­ti­zens at risk,” said Mr Kinoti.

In July, the rot at Kenya Power fi­nally caught up with the man­age­ment af­ter Di­rec­tor of Pub­lic Pros­e­cu­tions (DPP) No­ordin Haji or­dered for the ar­rest of of­fi­cials of the firm over cor­rup­tion al­le­ga­tions.

In one swoop, the DPP or­dered for the ar­rest of se­nior man­agers in­clud­ing for­mer manag­ing di­rec­tor Ben Chumo and his suc­ces­sor Ken Tarus over pro­cure­ment of de­fec­tive transformers and the ir­reg­u­lar­i­ties in pre-qual­i­fy­ing 525 com­pa­nies for labour and trans­port con­tracts.

Eco­nomic crime

Be­sides Dr Chumo and Dr Tarus, other sus­pects are com­pany sec­re­tary Beatrice Meso, gen­eral man­ager busi­ness strat­egy Pe­ter Mun­gai, gen­eral man­ager com­mer­cial ser­vices Joshua Mu­tua, gen­eral man­ager re­source and ad­min­is­tra­tion Abubakar Swaleh, gen­eral man­ager ICT Sa­muel Ndi­rangu, gen­eral man­ager in­fra­struc­ture devel­op­ment Stan­ley Mutwiri, gen­eral man­ager net­work man­age­ment Ben­son Muri­ithi, gen­eral man­ager re­gional co-or­di­na­tion, Pe­ter Mwicigi and head of sup­ply chain John Om­bui.

The court heard that they led to losses amount­ing to Sh408 mil­lion at the power sup­plier by procur­ing sub­stan­dard transformers. The charges stated that they con­spired to com­mit an eco­nomic crime be­tween Au­gust 3, 2013, and June 12, 2018, when they pro­cured the transformers from a com­pany known as M/s Muwa Trad­ing. They de­nied the charges.

Kenya Pipe­line is an­other agency that has been hit by cor­rup­tion claims run­ning into bil­lions of shillings. On Fri­day, the Pe­tro­leum min­istry ap­pointed an in­terim manag­ing di­rec­tor to run the scan­dal-dogged Kenya Pipe­line on the day Mr Sang was ar­rested.

Mr Hud­son An­dambi, who has been an al­ter­nate di­rec­tor rep­re­sent­ing the min­istry at the Kenya Power board, will take the cor­ner of­fice as the board sits next week to pick a re­place­ment from the man­age­ment.

Pe­tro­leum Prin­ci­pal Sec­re­tary An­drew Ka­mau said in a state­ment on Fri­day that Mr An­dambi would only stay for “a cou­ple of days” to fill the void.

“He is only there to hold un­til the board meets next week to de­lib­er­ate on the way for­ward, may be up to Tues­day or Wednes­day and then he will be back to the min­istry. He is some­one with a grasp of the place hav­ing been an al­ter­nate di­rec­tor for the board," Mr Ka­mau said.

In June, it emerged that faulty transformers at the Kenya Elec­tric­ity Trans­mis­sion Com­pany's sub-sta­tions have been the cause of fre­quent power out­ages around the coun­try, an in­ter­nal au­dit re­port on the paras­tatal says. This put into ques­tion the cri­te­ria used to pro­cure such faulty equip­ment.

The power fail­ures' real im­pact is di­lu­tion of qual­ity of sup­ply that ul­ti­mately drives busi­nesses into ex­tra costs that are passed on to tax­pay­ers in form of ex­pen­sive goods from the man­u­fac­tur­ers.

The newly con­structed Sh1.7 bil­lion Kisumu oil jetty at the Kenya Pipe­line Com­pany de­pot. The DPP has ap­proved three charges against out­go­ing Kenya Pipe­line boss Joe Sang and five other peo­ple in the case con­cern­ing the Kisumu oil jetty.

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