Details have emerged of how the state sank billions of shillings in the ambitious Last Mile electricity connectivity project that largely failed.
The latest report by Auditor General Nancy Gathungu reveals that thousands of poor households targeted in the Sh63 billion initiative did not benefit, after all.
This even as it emerged that the project, which was heavily funded by a loan, left the government with a huge debt as it failed to sustain itself.
The report shows that while up to 89 per cent of the targeted beneficiaries were connected, most homesteads did not enjoy power. Those who enjoyed it did so for just a short period before it went off.
Last Mile was one of ex-President Uhuru Kenyatta’s flagship projects targeted at accelerating electricity connection through expansion of power distribution networks.
Gathungu states that the project was hit by several challenges ranging from faulty meters and accessories, to dysfunctional transformers and frequent power blackouts.
The auditor further reveals that Kenya Power connected electricity to non-existent homes leading to massive losses in connection fees as there was no power consumption.
“Physical verification revealed instances where KPLC had installed service cables and meters on parcels of land where owners were yet to construct houses,” the report states.
“The mounted meters were lying idle and were exposed to vandalism,” it adds.
Many beneficiaries, majority of them poor families, also abandoned the project after connection as they were unable to buy electricity tokens.
KPLC connected electricity to non-existent homesteads, with some experiencing delayed implemention, leading to massive losses.
The audit has put Kenya Power and Lighting Company in a spot for procuring low quality meters and accessories.
“KPLC and the suppliers of the pre-paid meters revealed that 21, 539 representing seven pre cent of the meters became faulty either during installation or after the brief usage by the beneficiaries,” the report states.
“In addition, interviews with beneficiaries revealed that 90 out f the 605 beneficiaries interviewed had faulty meters and accessories,” it adds.
According to the report, the beneficiaries endured frequent power outages, averaging five times a month
In addition, the beneficiaries experienced dimming of lights and inability to power electrical appliances, with some reporting damaged equipment.
“The frequent blackouts and transformer breakdowns were caused by various factors: transformer components failure, bad weather and regular service interruptions,” it states.
The electricity also proved too expensive for most of the homesteads who abandoned it almost immediately, affecting the repayment of the loan.
“Deta obtained through interviews with beneficiaries sampled revealed that out of the 596 beneficiaries who paid the connection fee through Stima Loan, only 11 per cent bought electricity tokens above the expected remittance amount of Sh416 per month,” the report states.
“This could be attributed to beneficiaries’ low socio-economic status, thereby negatively affecting their purchasing power,” it adds.
According to the programmes, beneficiaries of the project were to pay connectivity fee through prepaid tokens.
For every purchase, 50 per cent of the amount was to go towards electricity units and the rest towards repaying the loans.
The beneficiaries were to repay the loan over a period of three years.
This translated to a minimum of Sh416 per month.
Thus, for the beneficiaries to be deducted the amount they had to make a minimum electricity purchase of Sh832, an amount that proved too high for most beneficiaries.
“As at April 30, 2022, only Sh1 billion against a target of Sh11 billion had been collected from the project beneficiaries,” the report states.
The project entailed connecting beneficiaries in low-income groups, rural and poor urban areas as well as small businesses to the national grid.
Some 1.14 million beneficiaries were targeted.
It was implemented in phases with the first three phases costing Sh63 billion, out of which Sh47 billion was loans by the World Bank and Africa Development Bank and Sh16 billion was contributed by the government.
The project commenced in December 2015 with the last phase expected to end in March last year.
However, the report states that the fourth phase had not commenced as at April last year.
The project was implemented by Kenya Power with the Ministry of Energy and Petroleum as the executing agency.
The report documents rampant cases of stolen and fraudulent use of meters, further ballooning the losses.
For instance, some 11 meters were taken away from Mariri Primary School scheme in Homa Bay by people purporting to be KPLC staff.
They alleged that the beneficiaries were not purchasing tokens.
Upon verification through KPLC power app, it was established that the meters were in use elsewhere, still bearing the names of project beneficiaries.
Gathungu notes that while the project had achieved several objectives including job creation, increase in small business enterprises and extended hours for study for children, the shortcomings severely affected its implementation.
The report shows that the government could have incurred extra costs in the delayed implementation of the project.
As at the time of the expected completion date in April last year, none of the four phases had been successfully completed, with phases in some areas showing as low 48 per cent completion.
For instance, phase II projects in Homa Bay and Kakamega counties were at 48 per cent and 49 per cent respectively as at the time of the audit.
“The delay in completion of the project resulted in contractors applying for contract extensions up to five times in some cases.”
This led to the extension of consultants’ contracts since they were to run for six months post project completion.
“The project extensions resulted in additional costs in the form of office space, rent for storage of materials and transport costs, consequently increasing the cost of the affected contracts, thus the overall cost of the project,” the audit states.
The auditor attributed the delayed completion of the project to slow processing of tax exemption approvals, delayed processing of contract of invoices and payments and nonpayment of way leaves.
“The Ministry of Energy, KPLC and other stakeholders such as the National Treasury and KRA should coordinate to streamline the tax exemption process in order to minimise delays in delivery of materials,” the report states.
There was also undue delays in connection of paid-up customers.
“For customers requiring medium voltage extension, transformer installation, and meter connection, the process should take 45 days cumulatively, LMCP however did not have defined timelines for meter connection,” it states.
The report further shows that many Kenyans were not aware of the project due to failure by KPLC to conduct public participation.
This led to slow submission and processing of documents presented by targeted beneficiaries.
“Out of 606 beneficiaries interviewed, only 92 confirmed that awareness barazas were conducted in their schemes,” the report says.