Governor questioned over Sh18b Turkana power deal
Current and former officials at the Ministry of Energy and four parastatals are facing arrest and possible prosecution over their role in the Sh18.5 billion Lake Turkana Wind Power (LTWP) project.
Ongoing investigations are targeting former and current board members and top managers at the Kenya Electricity Transmission Company (Ketraco), Kenya Power (KP) and the Energy and Petroleum Regulatory Authority (EPRA). All three institutions played a role in the tendering and execution of the power project that was meant to lower the cost of electricity.
People Daily has established that Kakamega Governor and former Ketraco chief executive officer Fernandes Barasa — who spent a second day at the EACC headquarters yesterday — is among the high profile individuals who have so far been questioned as part of the ongoing investigations.
Sources said he and other former top energy sector bosses have also been summoned to record statements over their alleged role in the project.
Barasa is on the spot over the manner in which Ketraco handled wayleaves acquisition and provision of access to Isolux, one of the companies awarded the contract.
Besides Barasa, others who have recorded statements with EACC include his predecessor, Joel Kiilu and former Kenya Power board member and Nyeri politician Esau Kioni.
“The matter is complex but there is a team of detectives who are investigating it,” said the EACC source who requested not to be identified because he is not authorised to speak to the media on the commission’s behalf. “The investigation includes recording statements from people who served in leadership posts and other critical departments in the ministry, Kenya Power, EPRA and Ketraco. Already witnesses have recorded statements and the people being dealt with are potential suspects,” the source said.
Yesterday, Barasa arrived at Integrity Centre at 7.30am and spent the entire day being grilled. By the time of going to press, the Kakamega governor was still at EACC with sources indicating that he could was likely to be questioned further today.
Under the contract under investigation, Ketraco was expected to grant access along the entire 428 kilometre stretch to M/S Isolux within 210 days from March 13, 2015. On June 2, 2016, Ketraco committed to the African Development Bank to have the compensation of Persons Affected by the Projects completed by the end of that month.
Minutes of the Wayleave Coordination Progress meetings of June 8, June 20, July 14 and October 13, 2017 and February 14, 2018m show that the wayleave acquisition process was still incomplete, contrary to Ketraco’s earlier commitment.
The project, which comprises 356 wind turbine generators — each with a capacity of 850kW —was completed in 2018, but delays in the execution led to a loss of Sh18 billion in penalties accrued between January 2017 and September 2018.
EACC is also investigating directors of two foreign companies contracted for the project, M/S Isolux of Spain and NARI Group Corporation & PowerChina Guizhou Engineering Co. Ltd.
Also on the spot are other local firms, among them, Lake Turkana Wind Power Ltd.The probe has seen detectives dispatched to the residences of two former chairpersons of boards in the affected parastatals, both of who are being treated as potential witnesses.
During the visits, detectives recorded statements from the two as the investigations, which revolve around the 438 km Loiyangalani–Suswa transmission interconnector (TI) and associated sub-stations by Ketraco, gain momentum.
In the project under the Ministry of Energy, Kenya Power’s scope of work was purchase, transmit and distribute electricity from Lake Turkana wind power while EPRA would oversee and regulate electricity tariff setting and approving the changes in energy tariffs.
EACC is investigating circumstances under which the project, where the government initially engaged Lake Turkana Wind Power Ltd and The Consortium of NARI Group Corporation & PowerChina Guizhou Engineering Co. Ltd to alleviate energy costs in the country, ended up incurring additional, avoidable financial penalties.
Despite NARI Group Corporation & PowerChina Guizhou Engineering Co. Ltd emerging as the most responsive out of the five bidders, it was recommended that the award process be undertaken through a specially permitted procurement procedure that was approved by Dr Kamau Thugge, then PS at the National Treasury.
The firm, according to a report by Parliament, was contracted on January 30, 2018, and completed the transmission line on September 10, the same year, earning Sh9.5 billion, and leaving a balance of Sh1.75 billion which is still pending, “plus any accrued penalties” amounting to approximately Sh1.1 billion as at the time of the inquiry.
Investigations into the scandal followed a report by the National Assembly’s Public Investments Committee and the Auditor-General pointing at the possible theft of the billions through deliberate “omissions and commissions” which delayed completion of the transmission line. The committee then invited EACC to investigate the matter and prosecute those found culpable.
During the committee hearings, Phylip Leferink, the Chief Executive Officer of Lake Turkana Wind Power, said the firm approached the Kenya government to undertake the development of the project, which was to financed by the private sector.