(Nairobi) – A recent audit has revealed that taxpayers in Kenya lost over KSh 7 billion due to delays in various power projects managed by the Kenya Electricity Transmission Company (Ketraco). According to the Auditor General, Nancy Gathungu, many of these costs could have been avoided if contracts had been executed in a coordinated and timely manner.
The audit report, covering the period up to June 30, 2023, indicates that public funds were spent on expenditures that offered limited value. For example, Ketraco paid KSh 417 million as a penalty due to delays in commissioning a Kenya-Ethiopia power-sharing project. The penalty was paid to a contractor who completed their portion of work in February 2020. However, the project’s launch was delayed because other sections were incomplete, ultimately triggering the penalty.
In another instance, the Kitale-Ortum project, designed to improve power distribution, faced significant issues after its contractor was declared bankrupt. As a result, KSh 85 million was spent on storage costs and customs fees for two transformers intended for the project. The Auditor General stated that these costs could have been avoided if Ketraco had acted to retrieve project assets in time.
Compounding these costs, one of the transformers for the Kitale-Ortum project malfunctioned, and several of its parts were reported missing. To proceed with the project, Ketraco had to involve Kenya Power to provide a replacement transformer, which led to further unplanned expenses. The audit concluded that the money spent on storage and custom warehouse fees, totaling KSh 85.7 million since 2016, did not provide clear value for the public.
| Project | Losses (KSh) | Reason for Loss |
|---|---|---|
| Kenya-Ethiopia Power-Sharing Project | 417 million | Delay in commissioning |
| Kitale-Ortum Project | 85 million | Storage and customs fees |
| Lessos-Tororo Interconnector | 4.5 billion | Contract termination and missing equipment |
| Substation Upgrade Equipment | 418 million | Deterioration due to harsh weather |
The audit also reviewed the Kenya-Uganda interconnector project, which aimed to link Lessos in Nandi to Tororo in Uganda. Ketraco now faces potential losses of over KSh 4.5 billion after the project’s termination. During the audit, officials discovered that 79 drums of conductors, valued at KSh 165 million and covering four kilometers, were missing from the project site. So far, Ketraco has not provided evidence of efforts to recover these missing materials.
Additionally, equipment worth KSh 418 million intended for a substation upgrade deteriorated after being left exposed to harsh weather conditions. This project, which was suspended eight years ago, remains incomplete, as Ketraco has not yet hired a new contractor to resume the work.