A new audit of the firm’s accounts as of June 30, 2023, says taxpayers coughed out more than Sh6.9 billion in unwarranted expenditures during the year under review.
Auditor General Nancy Gathungu says value for money on the otherwise avoidable expenses could not be confirmed in the ensuing circumstances.
Among the payments is Sh417 million fine paid for the delayed commissioning of a project for sharing power between Kenya and Ethiopia.
The money was paid to a contractor who was implementing one of the four lots the project was divided into. While the contractor had finished the work in February 2020, the project could not be commissioned due to delays in the completion of associated contracts.
“The cost would have been avoided had the associated contracts not been implemented in a staggered schedule,” Gathungu says.
In another project, taxpayers paid out Sh85 million on storage costs and custom warehouse rent for two transformers that were shipped for the Kitale-Ortum project.
The contract for the project had been terminated after a contractor was declared bankrupt with the auditor general saying the expense could have been avoided.
“The charges would have been avoided had management reviewed the project status and taken possession of the project assets,” the auditor general says.
Besides the customs charges, the audit review established that one of the transformers had malfunctioned and several parts were missing, escalating costs.
Management, it emerges, engaged Kenya Power to provide an alternative transformer for commissioning, resulting in further costs.
“In the circumstances, value for money of Sh85.7 million incurred on storage costs and custom warehouse rent for the two transformers since 2016 could not be confirmed,” Gathungu says.
Ketraco further sustained losses in the Kenya-Uganda interconnector line which entailed a line linking Lessos in Nandi to Tororo and a substation upgrade.
Besides an imminent loss in payment of more than Sh4.5 billion for termination of works, some equipment went missing.
The audit says 79 drums of phase conductors covering four kilometres valued at Sh165 million had been removed from the project site.
“Management did not provide evidence of action taken to recover the lost items,” it says.
At the same time, equipment valued at Sh418 million meant for the substation, has deteriorated due to harsh weather.
Gathungu is further concerned
that eight years from the date of
termination of the contract, a new
contractor is yet to be sourced.
