The Kshs.30.2 billion Lake Turkana Wind Power (LTWP) project has come back to haunt Energy Principal Secretary Joseph Njoroge and his predecessor Patrick Nyoike, following a report by the Auditor General Nancy Gathungu recommending they be held accountable for allowing a non-competitive procurement process.
Auditor general Gathungu cited the officials for their act of commission in the skewed approval and execution of the multi-million-shilling Lake Turkana Wind Power (LTWP) project, saying that it led to lack of fairness, transparency, equity and cost effectiveness.
In a special audit report to the National Assembly, Ms. Gathungu said Kenya Power had not obtained a license to generate electric power at the time LTWP executed the Power Purchase Agreement (PPA) with the parastatal. The license to generate electric power was granted almost a year later after the agreement was executed. At the time, Njoroge, was the Managing Director, while PS Njoroge was a Board member of Kenya Power. The Lake Turkana power project was expected to increase the country’s power generation.
This delay has been expensive, as Ms. Gathungu revealed, with consumers bearing the brunt of footing the balance of Kshs.9.8 billion as LTWP started recovering the money through a tariff increase by Kenya Power from June 1, 2018 and is expected to end in May 31, 2024 which is the recovery period. The PPA was executed between LTWP and KPLC on January 29, 2010, before LTWP Limited had obtained a license to generate electric power, which was granted almost a year later on December 16, 2010 after the PPA was executed.
Now, the Auditor General Nancy Gathungu has recommended that top officials be held accountable for allowing a non-competitive process in identification and implementation of the project, leading to Kenyans suffering.
PPA is the primary contract between the public and private sector parties which underpin a power sector with utility firm Kenya Power.
It also emerged that their action caused a 21-month delay in completion of the Kshs.30.2 billion 428-kilometre high-voltage transmission line, which runs from Lake Turkana wind turbines in Loiyangalani to Suswa sub-station in Narok.
Gathungu said that due to the delays, consumers have been bearing the brunt of footing the costs of resultant penalties as LTWP started recovering this money through a tariff increase by Kenya Power from June 1, 2018 and is expected to end in May 31, 2024. Kenya Electricity Transmission Company (Ketraco) completed the transmission line on September 24, 2018, 21-months after the developer LTWO completed the power generation plant.
The delays to evacuate power from the LTWP ltd plant resulted in accrued penalties to GOK and claims of Kshs.18, 499, 672 for the period 27 January 2017 to 10 September 2018. The government has so far paid Khs.10.2 billion as penalties to LTWP investors out of the total Kshs.18.5 billion it is owed. Kenyans are shouldering the balance of Ksh.9.8 billion.
The monopolistic national power company, has been shaken by corruption allegations which has seen the top management officials arrested on allegations of corruption while Kenyans and industrialist continue to suffer unsustainable power bills, with some relocating their businesses to neighboring countries.