Seal revenue leaks at Kenya Power
The Office of the Auditor-General recently laid bare the massive rot in the management of Kenya Power and Lighting Company (KPLC) exposing loopholes through which wananchi have lost billions of shillings even as the State moved to restructure the power utility.
The Auditor-General squarely fingered the board and management for malpractices, including non-compliance with the Capital Markets Authority, losses due to stalled projects and failure to surrender unclaimed assets.
As the Nairobi Securities Exchange (NSE) listed firm celebrates a century of service to Kenyans next year, it is saddled with problems that could sink it if not sorted out. With the company losing 23 per cent of its electricity due to inefficiencies, the regulator passes this bill onto consumers who pay an estimated Sh19 billion annually.
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One wonders why the regulator doesn’t investigate causes of the massive losses instead of allowing the firm to pass the burden onto consumers.
However, it seems the elephant in the room has been revenue earned by Independent Power Producers (IPPs) from the utility’s kitty. The Auditor-General wonders how this happened, but Kenyans must be told why Kenya Power is paying IPPs three times more for power, compared to government-owned Kengen.
Other red flags raised by the auditor include lots of uncollected funds, weak IT systems that do not call for accountability, coupled with open logins that have been inactive for too long. Also, the firm has been fingered for purchasing faulty prepaid meters which will have to be written off.
Save for the fact that the company suddenly posted a profit before tax of Sh8.198 billion for the period up to June 2021, compared to a loss before tax of Sh7.042 billion the previous year, the only reason the firm remains afloat is high monthly collections.
The Auditor-General warns the firm will struggle to meet its short-term obligations as it has much more liabilities compared to assets. Questions also abound why Kenya Power bosses held 90 meetings a year drawing heavy allowances from an ailing company.
As the task force on electricity costs moves to streamline issues at the utility firm, obviously these issues are an open secret. But for mwananchi and for the sake of the economy, they must come up with a formula to reduce the cost of power by 33 per cent as promised. However, this is unlikely to succeed if the variable components of KPLC bills are not reviewed sooner rather than later.
