MPs want Kenya Power probed over loans repayment

Two Parliamentary Committees have been ordered to investigate the circumstances under which the government guaranteed and continues to pay loans for Kenya Power, which has the electricity distribution monopoly.

Deputy Speaker Faarah Maalim on Wednesday asked the Finance and Energy Committees to investigate the matter after the company was listed among 15 parastatals that have failed to pay loans totaling Sh72.4 billion.

Finance assistant minister Dr Oburu Oginga said the Kenya Power is yet to pay back Sh1.4 billion, whose interest has accumulated to Sh1.1 billion.

This means that the company will pay Sh2.5 billion, with the amount expected to increase with the repayment period.

The government offered guarantees for the parastatals to borrow the money, paid back the loans and now seeks to recover the money from the State corporations.

Dr Oginga did not specify when the money was borrowed, what it was intended for and who the creditor was.

The electricity distribution company changed its name from the Kenya Power and Lighting Company (KPLC) to Kenya Power in June.

MPs suspected that the change of the company’s name could have been part of a scheme through which it would refuse to pay back the money, leaving it to the government and in effect, the taxpayer.

Rangwe MP Martin Ogindo (ODM) asked Dr Oginga to clarify whether the company was still public and why the government would still be servicing loans it owed.

“The government is bearing the burden of having to pay these defaulted loans, which introduces rigidity in its annual Budget,” said Mr Ogindo, who is a member of the Budget Committee.

“The Ministry of Finance is notorious for taking up debts that do not belong to it,” he added.

Dr Oginga explained that the debts were incurred when the government had a controlling stake in the company and that the guarantees it had given still stand.

Jackson Kiptanui (Keiyo South, ODM) asked the minister to explain why Kenya Power still declares a profit yet it owes debts which it should state in its books of accounts.

Dr Eseli Simiyu (Kimilili, Ford Kenya) and Martha Karua (Gichugu, PNU) asked Dr Oginga to state how much has been recovered from Kenya Power and the schedule for further repayments.

Said Dr Simiyu: “It appears that privately, Kenya Power has been privatised. The Public Investments Committee should investigate this matter since it seems the taxpayer is burdened by Kenya Power’s debts yet it has been privatised.”

But Dr Oginga did not have the details the MPs demanded.

He said the government has so far recovered Sh6.3 billion from all the parastatals whose loans it had guaranteed and its policy is to recover all the money.

Other parastatals that have defaulted on their loans are; Tana and Athi Rivers Development Authority (Sh1.6 billion), Tarda Power (Sh2.1 billion), Kenya Railways Corporation (Sh1.3 billion), Nzoia Sugar (Sh4.6 billion), City Council of Nairobi (Sh3.9 billion) and the National Housing Corporation (Sh9 million).

Others are; East African Sugar (Sh226 million), Kenya Broadcasting Corporation (Sh4.1 billion) Sony Sugar (Sh55 million), Development Finance Corporation (Sh132 million), Kenya Ports Authority (Sh109 million), Agricultural Development Corporation (Sh176 million) and Agro-Chemical (Sh540 million).