alexa Chinese firm wins Sh740m Kenya Power meters tender - Daily Nation

Chinese firm wins Sh740m Kenya Power meters tender

Monday January 20 2020

 Kenya Power

A Kenya Power employee inspects a meter box. PHOTO | FILE | NATION MEDIA GROUP 

PATRICK ALUSHULA
By PATRICK ALUSHULA
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Chinese firm Shenzhen Star Instruments Company has won a Sh746.2 million tender to supply single phase prepayment meters to Kenya Power.

The electricity distributor reveals in the tender award that the Chinese company, with local directors, will deliver the meters as the utility firm continues connecting more people to the national grid.

Electricity sales revenue for customers on prepaid metering is recognised when customers buy electricity units.

Cash-strapped Kenya Power expects to add more customers through the return of its Last Mile Connectivity Project (LMCP) that links homes to the national grid under a subsidised programme.

The tender award comes barely two weeks after the firm invited bids for supply of nearly 200,000 post-paid meters, signalling that it favours a mix of pre-paid and post-paid meters.

This is in contrast to an earlier plan to completely switch to pre-paid meters to reduce mounting customer debt.

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Shenzhen Star had in 2017 bid for another tender worth Sh1.25 billion to design, supply and install an advanced metering system to Kenyan Power but lost to rival Chinese firm ZTE Corporation.

LAST-MILE CONNECTIVITY

The directors of Shenzhen Star are listed as Ronald Kingeru Kaburia, Netfast Communications Ltd and Vigelo and Gelo Construction Ltd.

Mr Kaburia, who is in charge of Shenzhen Star operations in Kenya, said last year that the firm would build a manufacturing facility at Tatu Industrial Park beginning the fourth quarter of 2019.

Kenya Power’s LMCP was launched in 2015 to scale up connectivity in rural and peri-urban areas by providing a subsidy for grid extension to enable customers get electricity supply at an affordable cost.

This has seen more people join the national grid.

However, the monopoly’s performance has declined in recent years despite rising customer numbers.

PROFIT WARNINGS

It has issued back-to-back profit warnings as earnings tumbled to 10-year lows.

It now expects the net profit for the year ending June 2019 to be more than 25 percent lower than the Sh1.92 billion after-tax profit posted the prior year.

The firm has attributed this to an increase in non-fuel costs in line with the company’s long-term strategy to grow cheaper and cleaner renewable energy.