An ouster petition has been filed at the High Court against Investments, Trade and Industry Cabinet Secretary Rebecca Miano over alleged procurement and financial irregularities during her tenure as the Chief Executive Officer (CEO) at the Kenya Electricity Generating Company (Kengen).
A lobby group has accused Miano of contributing to the incessant national blackouts by wasting taxpayers’ money on white elephant power production projects, unusable high voltage transmission lines and commissioning feasibility studies on two new power plants that ended up being hot air.
Justice Lawrence Mugambi on October 23 directed the petition be served to the respondents within 14 days.
The Ethics and Anti-Corruption Commission (EACC) has also been cited as an interested party in the case whose mention is slated for January 29, 2024.
‘Illegal, unlawful, irregular misuse of taxpayer’s money’
“There was illegal, unlawful and irregular misuse of taxpayers’ money a fact that was confirmed by the Auditor General in her reports for the years 2020, 2021 and 2022,” says an affidavit by Francis Awino filed in support of the suit.
According to Awino, CS Miano is also the reason why Kenyans are suffering with huge power bills because it was during her time at Kengen that huge losses were reported because of wasting billions of shillings on incomplete projects. The impact of this mismanagement is now being felt in high power tariffs and nationwide blackouts.
“While serving at Kengen she misappropriated a lot of funds and it is not for the President to appoint her as Trade CS which is a powerful post. She is the reason why most Kenyans cannot afford electricity while we are generating it. She will mismanage the ministry the way she did to Kengen,” Owino claims.
Miano was moved from the East African Community, ASALS, and Regional Development in October to the powerful Trade Ministry which was previously being held by Moses Kuria during the recent cabinet reshuffle by President William Ruto.
However, she has been accused of spending Sh94 billion of taxpayers’ money on white elephant power generation projects during her term as the CEO of Kengen.
Despite high expenditure, Kenya lacks investments in power sector
While appearing before the National Assembly’s Energy Committee on December 21, Energy Cabinet Secretary Davies Chirchir blamed the incessant nationwide blackouts on network overloads due to years of lack of investment in the country’s power generation and transmission capacity.
Yet according to the petition filed before Justice Mugambi, Kengen spent Sh79,324,783,562 on drilling geothermal wells between the year 2011-2015. However, Kenya did not connect them to the national grid.
The wells were financed through a loan from the Export-Import Bank of China.
Despite the wells remaining idle, taxpayers continue to pay the principal sum and interest of the loans while at the same time paying through the nose for electricity procured from thermal Independent Power Producers (IPPs).
“No corresponding revenue had been realized to date and the Respondent did not give the details of when the wells are likely to be utilized in generation of power. As a result, there was no value for money obtained on the investment of Kshs.79,324,783,562/= on drilling wells,” says the petition.
Miano flouted public procurement guidelines
Miano is also being accused of flouting procurement rules by spending Sh645 million on feasibility studies for new power production plants that have never been constructed to date. This includes Sh592 million spent on a feasibility study for the construction of the Meru Wind Power plant and Sh82 million for the Karura Hydro Power plant.
“Although expenditures were said to relate to the feasibility studies on the two projects no contract documents and feasibility studies reports were provided for audit verification in support of the projects,” says the petition.
“The Respondent has not provided reasons for the delay in the conclusion of the feasibility studies for over eight years,” says the petition.
Additionally, the CS is accused of allowing power transmission lines constructed by Kengen for Sh4 billion in 2009 to be used by another company to generate revenue while committing taxpayers to service a loan used for their construction.
“Although the Respondent indicated that there had been negotiations for the transfer of the assets to the other company, Kengen continued to service a loan and accruing interest in respect of these assets, thereby increasing the operations costs of the Company and cash outflows without corresponding revenue being realized.”
Irregular award of contracts
Furthermore, the CS is accused of irregular contract award for the construction of Hydro Plaza. This irregular award according to the petition caused the first contractor to be terminated for non-performance and a second one brought in. The change caused a 74 percent increase in the original sum without an explanation.
“The Respondent partially capitalized the building with a sum of Sh293,529,602. However, certificates of completion for the capitalized were not provided for audit review,” says the petition.
“Further, a review of procurement records revealed the works were initially awarded at a cost of Sh150,005,216 but the contract was terminated on nonperformance and subsequently awarded to another contractor at a contract sum of Sh261,264,205, an increase of or 74 percent of the earlier contract sum,” says the petition.
The case is expected to be mentioned before Justice L.N. Mugambi on January 29, 2024 at the Milimani Law Courts.
