Firms threaten to close down over high power costs

Manufacturers have threatened to close their businesses because of high power costs. The revelation was made by Energy minister Kiraitu Murungi when he appeared before the Parliamentary Committee on Energy, Communications and Information.

The minister said he receives letters from both big and small manufacturers on a daily basis complaining about the escalating cost of electricity, which, in turn, raises production costs.

He said as a result, they were considering closing down their operations. He told the committee that the manufacturers have appealed to him to urgently intervene.

The minister told the team, which is chaired by Mr James Rege, that he had asked Treasury to consider subsidising the cost of power in the wake of the threats. “I am also concerned about the high costs,” he told the team during a session conducted at Continental House.

Mr Murungi said he was yet to get a response from Treasury. The minister was accompanied by permanent secretary Patrick Nyoike and Kenya Power and Lighting Company (KPLC) managing director Joseph Njoroge.

KPLC told the committee that it was not making profits just for the sake of it but that it needed to stay afloat and attract financiers since it had several projects to undertake. The government has a 48 per cent share in the company. The rest of the shares are in private hands.

The parliamentary committee has been meeting key players in the energy sector for the past one month. Those who have met the team include managers of the Kenya Pipeline Company, the Rural Electrification Authority, Geothermal Development Company, Kenya Petroleum Refineries Limited, and the Energy Regulatory Commission.

The focus has been on the energy situation in the country. The issue of a strategic power reserve for Kenya, especially petroleum products, has been discussed. The meeting with Mr Murungi was meant to get his response on various issues raised by those who have appeared before the committee.

On Tuesday, Energy assistant minister Charles Keter told the House that KPLC would go under if it reduced power charges. This was after MPs complained about the high cost of electricity.

The assistant minister told members that of the Sh1.8 billion profit made by the company in the past six months, Sh1.6 billion would be used for network expansion and improving services.