Kakamega governor candidate Barasa haunted by Sh18billion contract

Kakamega governor candidate Fernandes Barasa is on the spot yet again as Members of Parliament now want the Kenya Electricity Transmission Company (Ketraco) management investigated over the delayed construction of a transmission line connecting the Lake Turkana Wind Power (LTWP) facility to the national grid, which resulted in a substantial punishment being imposed on taxpayers.

A parliamentary committee has suggested that the management of a state agency be investigated in connection with a delayed electricity project that cost taxpayers Sh18 billion.

The charge was for presumed generated energy, which occurs when a plant is able to create electricity but unable to send it to the off-taker’s system.

The Public Investments Committee (PIC) of the National Assembly wants Ketraco management probed over contract management and implementation for the project, according to a report submitted to the House on Thursday afternoon.

The fine was imposed due to a delay in the completion of a 428-kilometre high-voltage power line from Marsabit to Narok’s Suswa substation, which serves as the major interconnection for power from various sources.

The LTWP plant was completed on January 27, 2017, however, the transmission line was not until September 10, 2018, about 19 months later.

“The EACC (Ethics and Anti-Corruption Commission) should investigate the Ketraco management on the contract management and implementation of the transmission interconnect or, including failure to secure way leaves and signing addenda to the contract that led to delay in the completion of the line and exposed Kenyan taxpayers to Deemed Generated Energy amounting to Sh18, 499,082,672 and higher energy bills,” reads the report.

At the same time, the committee wants the accounting officers who were in charge at the time the contract was signed to be held accountable for not performing an independent legal risk assessment prior to signing contracts for such a large capital project.

“The project was the single largest public-private partnership in Kenya and no risk analysis was carried out to establish potential challenges to the project such as delayed construction of the transmission line. These infractions exposed the government, taxpayers and other partners to value for money and litigation risks for delayed payments to contractors,” reads the report.

After the date of the plant’s completion, until then when the transmission line was operational, LTWP was entitled to government transmission interconnect or delay and deemed generated energy payments under the terms of the Power Purchase Agreement (PPA) and the government letter of support issued on February 28, 2013.

According to the PPA, the government was to build a new 400kV substation near Loyangalani (which had previously been operated at 220kV), as well as a 220kV substation near Suswa, as well as all associated works.

LTWP was responsible for financing, designing, procuring, constructing, installing, testing, commissioning, operating, maintaining, and selling net electrical output to Kenya Power.

Kenya Power, on the other hand, was compelled to evacuate all net electric power generated by the LTWP facility for a period of 20 years after it was commissioned.

The 300MW LTWP was recognised as a significant flagship project of Kenya Vision 2030s energy sector in 2008, as one of many power generation projects needed to fulfil growing demand.

The wind farm, Africa’s largest, consists of 365 wind turbines, each having an 850kW capacity, as well as a high-voltage substation.

The committee proposes that the government develop the technical and financial capacity of public finance management officers in implementing projects through public-private partnerships in order to avoid such unjustified penalties.

This, it claims, will improve the efficiency and efficacy of such projects’ execution.

The committee also advised that the Attorney-office General be involved in the design and/or evaluation of PPA provisions before they are signed, in order to guarantee that terms are competitive and do not prejudice Kenyan taxpayers.

The given the following out that the AG now only has a ceremonial role in PPAs because the agreement is only brought to his office for signature after everything has been completed. According to the MPs, this makes it harder for the AG to crack down on any criminal activity.

“It was further noted with concern that the office of the Attorney General did not draft the PPA between LTWP and KPLC considering that such contracts bind the government,” reads the report.

The MPs also noted in their report that the LTWP plant is located on disputed territory that is the subject of a legal battle between Marsabit inhabitants and the firm.

According to documents provided to the committee, LTWP was granted a 99-year lease beginning in 2009.

The land’s title deeds were voided by the High Court in Meru, which said it was acquired illegally and gave the Marsabit County government, the Attorney General, the Chief Land Registrar, and the National Land Commission one year to rectify the situation.