KPC to pay State Sh5b in dividend

Wednesday, March 27th, 2024 05:20 | By
kenya pipeline company
Kenya Pipeline Company (KPC). PHOTO/Print

Kenya Pipeline Company (KPC) has announced a special dividend payout of Sh5 billion to the National Treasury for the fiscal year ending June 2023.

News of the payment follows a 21 per cent increase in KPC’s profitability, which soared to Sh7.6 billion in the 2022/2023 financial year, up from the previous year’s Sh6.3 billion.

Managing Director, Joe Sang, along with Energy and Petroleum Cabinet Secretary (CS) Davis Chirchir, will present the ceremonious dividend cheque to National Treasury CS Njuguna Ndung’u at KPC headquarters.

This dividend allocation is in line with President William Ruto’s stringent financial directives for government parastatals.

To meet the increasing demand for government revenue, Ruto has mandated state-owned commercial enterprises, including KPC, to remit 80 per cent of their net profits to the Treasury, effective immediately. CEOs of parastatals have been directed to reduce recurrent budgets by 30 percent as part of a broader strategy to streamline operations and minimize unnecessary expenditures.

Furthermore, Ruto has issued a stern warning to loss-making government institutions, cautioning that they risk closure within the next three years if they fail to enhance their financial performance.

Demonstrating its adaptability to serve the public, KPC has repurposed the decommissioned Mombasa-Nairobi oil pipeline to supply water to the coastal city. This operational shift underscores KPC’s commitment to public service.

To enhance service provision, KPC has established state-of-the-art laboratories, resulting in annual savings of over Sh47 million. Through its quality control department, the company plans to outsource services to local firms, including state-owned entities, thus further optimizing operations.

Following the recent privatization decision, KPC has announced the construction of a new pipeline from Mombasa to Nairobi.

This strategic move aims to enhance infrastructure and operational efficiency, aligning with President Ruto’s mandate for state enterprises to operate sustainably. The initiative is expected to positively impact KPC’s long-term profitability.

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