The government has threatened to open a can of worms after reports from the Daily Nation on Thursday July 9 emerged that they paid more than Sh7 billion in penalties to investors behind the Lake Turkana wind power project for electricity that was not reaching Kenyans, in what could be the latest mega scandal.
The penalties were due to the delayed completion of the Sh28.9 billion 430-kilometre high-voltage power line from the Lake Turkana wind turbines to Suswa sub-station in Narok, which is the country’s main interchange for electricity coming from different sources.
The contract for the construction of the line was awarded in 2014 to Grupo Isolux Corsan, a Spanish company.
The project was to be completed in 2016, but it was not until September 2019 that President Uhuru Kenyatta inaugurated the power line in Suswa following years of delays after the Spanish company got into financial difficulties.
The wind farm, the largest in Africa, with a capacity of 310 megawatts, enough to power up to one million homes, was supposed to inject the first 50 megawatts into the grid in October 2016 and the whole capacity by July 2017.
What is emerging is that the government spent billions to pay foreigners penalties as well as casual labourers shipped from China to complete the power line after the Spanish contractor closed shop.
Interestingly, the latest tranche of Sh1.16 billion was paid by the government despite recommendations by the National Assembly that no more payments should be made until a special audit into all the payments is carried out.
The amount was approved by the National Assembly during the reading of the 2020/21 budget on June 30, 2020.
Initially, what made the MPs raise eyebrows was the fact that Sh6 billion had been paid to the wind farm investors during the Supplementary II budget for 2017/18, for electricity that was not reaching Kenyans and, therefore, not making the cost of power in the country cheaper.
In efforts to block payment of further penalties, the Energy Committee of the National Assembly, chaired by Nakuru Town East MP David Gikaria, recommended to the Budget and Appropriations Committee that no other payments should be made until a special audit on the wind project and the evacuation line is done.
Mr Gikaria on Wednesday July 8 confirmed to the Daily Nation that what is raising more issues on the two contracts is the fact that the cost is not clearly known.
“Officers in charge from the government keep on giving us different figures in terms of the cost of the contracts,” Mr Gikaria said in reference to the Ministry of Energy and the Kenya Electricity Transmission Company (Ketraco).
“The only thing that will unearth all these issues is the special audit that we have requested as a committee,” he said, adding: “We also need an audit on the transmission line and the deemed power that we have been paying for.”
From June 2018, the government was to pay an additional penalty of Sh1 billion monthly for delays in connecting the plant to the national grid.
On February 11, Internet giant Google dropped plans to buy Vestas Wind Systems A/S’ 12.5% stake in the 310-MW Lake Turkana Wind Power plant in Kenya, according to a report by Reuters.
The Alphabet Inc’s unit scrapped its intentions for the purchase due to certain delays on the project, mainly related to its transmission line. The Danish wind turbine maker held talks with other potential buyers, a Vestas spokesperson told the news agency.
The Lake Turkana wind farm was initially scheduled for completion in 2017 but its commissioning was delayed due to the protracted construction of the 428-km (266-mile) transmission link to the power grid. It was officially opened in July 2019 and is anticipated to generate enough power for about 330,000 local homes.
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