The power distribution firm top leadership faces major re-organisation including declaring redundancies as the newly appointed board chairperson Vivienne Yeda sets in motion policy guidelines turnaround strategy.
Kenya Power Managing Director Bernard Ngugi could be one of the key casualties in the looming shake-up.
Despite enjoying near-monopoly of power distribution in the country, the utility firm continues to accumulate unexplained losses that insiders attribute to mismanagement and internal revenue leakages.
“Despite the public pronouncements by senior ministry officials to rescue the institution from going under, serious managerial issues have been raised. These will be key in the revival strategy being worked out. Big names will be on the chopping board.” Our source who spoke on condition of anonymity intimated.
Yeda took over as the chairperson of the company’s Board of Directors from her predecessor Mahboub Maakim.
Kenya Power has been struggling with losses and mounting debt despite raking in revenues in billions of shillings.
Already, the parastatal under the Ministry of Energy has initiated talks with World Bank, National Treasury and Africa Development Bank to support the company and ease high debt obligation.
The firm wants the financers to buyout the short- term debt which is Sh.102.6 billion which the firm says that they are expensive and not sustainable in exchange for longer tenure ones.
Ngugi acknowledged that they have a commercial debt of up to Sh.65 billion, charged an average interest of 4.5 per cent and a LIBOR of two per cent. The rest is shilling denominated one from local banks charged at 12 per cent per annum.
Energy Cabinet Secretary Charles Keter and Kenya Power management who were briefing the Senate Committee on Energy, were pushed to illustrate the true nature of the company’s loans, with some Senators suggesting that the power utility firm should be put under military administration just like the Kenya Meat Commission.
Senators at the committee said the interests charged are expensive and asked the management to look for a sustainable refinancing module.