Taxpayers to offset Sh5.1billion KETRACO bill for breach of contract with Spanish firm
It will cost the taxpayer at least Sh5.1billion to pay a Spanish firm contracted by the Kenya Electricity Transmission Company (Ketraco) to construct an electricity line linking local and Ugandan power grids.
The state owned company withdrew its appeal to the Supreme Court to overturn a court of Appeal’s order to pay the Spanish contractor, Instalaciones Inabensa S.A, the amount for breach of the contract financed by an African Development Bank (AfDB) loan.
Ketraco’s manager for legal services, Lydia Wanja told the three judge bench that the Apex court having substantially pronounced itself, in its ruling delivered on October 7, 2022, on the dispute, the state corporation saw no need to pursue the appeal.
In the said ruling, the apex court said it lacked jurisdiction to hear and determine the appeal. It had also found that the appeal was not arguable.
Justices Mohammed Ibrahim, Isaac Lenaola, and William Ouko allowed the withdrawal application and ordered Ketraco to bear the costs of the appeal.
Ketraco had contracted the Spanish firm twice for the construction of an electricity transmission line and the extension of existing substation at Lessos in Rift Valley in April 2013.
The Spanish company was to construct a 127-kilometre 420-kilovolt double circuit line from Lessos to Tororo in Uganda with a capacity of 1,200 megawatts.
The project, which had been stalled was part of the larger contract that involved interconnection of electricity grids to other Nile equatorial lakes countries- Burundi, Democratic Republic of Congo and Rwanda via separate individual loan deals with AfDB.
However, in April 2016, Ketraco terminated the services of the contractor over what it termed “non-performance’ stalling the project that was halfway complete.
Ketraco lost the first attempt to offset an arbitration claim at the High Court in February 2021 and asked the Court of Appeal to suspend the execution of the orders of Justice Maureen Odero.
