Activists in to court to seek refund for Wind Power deal

Monday, October 12th, 2020 00:00 |
Lake Turkana Wind Project farm site and wind turbines. Photo/PD/File

Bernice Mbugua and Alphonse Mung’ahu

Controversies surrounding the Lake Turkana Wind Project (LTWP) has taken a new turn after two activists moved to court seeking a refund of the Sh39.6 billion paid to the contractors.

Activists Okiya Omtatah and Wycliffe Nyakina filed the case in 2018 arguing that Kenyans might have lost Sh39.6 billion after Lake Turkana Wind Power Ltd was paid the money yet it did not supply any energy.

Omtatah and Nyakina want the firm to return back the said monies to the National Treasury, which was paid by Kenya Power and Lighting (KPLC). 

“The  Sh39.6 billion includes Sh13 billion captured in the 2017/2018 national budget as having cumulatively been paid to the firm, Sh17 billion being payments made during the contractual period with the Spanish contractor, Isolux Corsan S.A. and a further Sh9.6 billion paid to the consortium of Chinese companies contracted to complete the transmission line,” says Omtatah in court documents.

 The duo is also seeking orders compelling the Government to recover with interest all the monies paid out directly to Lake Turkana Wind Power Ltd and all the cash used to construct the Suswa-Loyangalani Transmission Line. 

LTWP has been named in the suit as first respondent. It has been sued for entering into a skewed 20-year “take-or-pay” contract that allegedly forces KPLC to pay for electricity at several times its cost of production, whether or not it is needed. 

The company is also accused of entering into a totally illegal contract with GoK, compelling the Government to construct the 428-km high voltage transmission  line required to evacuate the power to the national grid. 

The Case in which Omtatah is challenging the procurement process of the project has now been lined up for hearing on December 8.

Omtatah and Wycliffe filed the petition to enforce the rule of law and to protect the Kenyan taxpayer and consumers of electricity from exploitation by LTWP.

He says the wind farm illegally constructed its 365 turbines on 40,000 acres of land in Marsabit against conservatory court orders issued by the Environment and Land Court in Meru.

Meru court had restricted the project to only 87.5 acres pending the determination of the on-going case. 

The 40,000 acres of land is the subject of a bitter ownership row between the company and owners of the land.

The wind farm thereafter filed  a notice of claim/indemnity dated March 8, 2018 at the Civil Court in Meru against the County Government of Marsabit seeking compensation of Sh223.8 billion.

Suit property

“The monies they sought were for the loss they incurred as a result of the  cost of construction of the wind power project on the suit property totaling to  Sh77 billion,” says Omtatah in court documents.

The wind power company also sought Sh136.5 billion for  Shareholder returns and profits from the project on the suit property.

Deferred Government of Kenya transmission interconnector delay deemed generated energy (DGE) payments totalling to Sh10.3 billion

Omtatah, however, claims the said company should not be compensated for the loss since the project was completed in defiance of a court order

“It is our case that LTWP cannot legally claim to have completed the project on the 40,000 acres to fulfil any contractual agreements between them and any of its partners, including the Government of Kenya, pending the determination of  the Civil suit in Meru,” argues Omtatah in court documents. 

The two questions the legal validity of LTWP surcharging the GoK some Sh10.3 billion for delaying to complete the construction of the 428km high voltage Suswa-Loyangalani Transmission Line required to evacuate the power from the wind farm in Marsabit to the national grid.

“The Government has already paid Sh4.6 billion and is poised to pay a further Sh5.7 billion,” argues Omtatah.

Omtatah and  Nyakina say in circumstances that are illegal and a naked fraud on the Kenyan taxpayer and electricity consumers, the contract compelling GoK to construct the transmission line violates the law.

“Section 5 of the “Feed-in-Tariffs Policy for Wind, Biomass, Small Hydros, Geothermal, Biogas and Solar Resource Generation Electricity” published by the Ministry of Energy, required LTWP to construct the transmission line in advance at its own cost,” argues Omtatah.

 Isolux Corsan S.A. that was overseeing the project went bankrupt, halting its operations in the country, a move that saw the government procure services of a second contractor to finish the job.    

In 2018, KETRACO contracted a consortium of Chinese companies at an additional cost of Sh9.6 billion to complete the works.

“Why was a security performance bond not executed by Isolux Corsan SA to indemnify the GoK in the event the Spanish contractor failed to deliver under the contract?

Why are the governments of Kenya and Spain taking no action against the contractor and its directors?” Questions Omtatah in court documents.

This will worsen Kenya’s economic situation, forcing the government to extract more from Kenyan taxpayers and natural resources in order to earn Euros for foreign companies.

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