The Kenya Electricity Transmission Company (Ketraco) awarded contracts worth over Ksh25.6 billion to bankrupt or collapsed foreign firms which failed to complete their jobs, it has emerged.
Among the firms that have pocketed billions despite doing nothing include Spanish firms Isolux Corsan, Instalaciones Inabensa, and India’s Jyoti Structures.
In one of the contracts, Instalaciones Inabensa was awarded a Ksh3.6 billion contract for the construction of the Lessos-Tororo transmission line. The company however failed to perform, forcing Ketraco to cancel the contract in 2016. To date, the project cost has risen to Ksh8.2 billion.
On February 12, Instalaciones Inabensa was awarded more than Ksh4.6 billion for wrongful termination.
Even as Ketraco stares at the loss of billions, a new completion date for the line is yet to be agreed on. Also, Ketraco has spent over Ksh220 million in litigation.
Already Ksh4.9 billion has been the project, with the transmission line 50 percent complete and a substation, which was part of the project, 61 percent complete. The line was meant to link Kenya to Uganda, Rwanda, Burundi, and DR Congo under the Nile Equatorial Lakes Programme.
The funding agreement with African Development Bank (ADB) expired in December 2017 and is yet to be renewed. Also, Ketraco did not engage ADB in the appointment of a new contractor.
“It is not possible to confirm when the matter will be resolved and how the cost in terms of legal fees that the company will incur will be reflected in the financial statements,” noted Auditor General Nancy Gathungu.
In another tender, Jyoti Structures Ltd was awarded a Ksh9.8 billion contract to build the Olkaria-Narok, Lessos-Kabarnet, Nanyuki-Rumuruti, Sultan Hamud-Mwingi high voltage transmission lines.
Jyoti was declared insolvent by Indian authorities, forcing Ketraco to cancel the contract and instead hired China CAMCE Company to complete the works. The completion date was moved to April 2020.
Ksh8.4 billion had been spent on the project as of June 2020, and the financier, ADB, has already withdrawn meaning the taxpayers will carry the burden directly.
The same company also had been awarded the Ksh7.6 billion 220kV Turkwel-Ortum-Kitale substations and the Machakos-Konza-Kajiado-Namanga transmission lines.
To add salt to injury, it is reported that Ketraco paid Ksh5.7 billion fine after Isolux Corsan failed to build the Loiyangalani-Suswa power transmission line to evacuate power from the Lake Turkana Wind Power.
The line has never been completed, and the remaining works were given to Nari Group Corporation and Power China Guizhou Engineering Company after Isolux went into receivership in 2018.
The line which cost Ksh28 billion went live in September 2018.
In another contract, Iberdrola Ingenieria of Spain had its Ksh4.9 billion contract terminated for non-performance. By the time it was canceled, the price had hit Ksh10.5 billion. The company was to build four substations at Athi River, Isinya, Ngong, and Komarock.
CG Holdings, a company contracted by Ketraco to construct the Meru-Isiolo-Nanyuki line collapsed, with the state agency now looking for a new firm.CG Holdings which is based in Belgium was declared bankrupt in February 2020.