KenGen's idle projects includes Kes79.3 billion invested in drilling wells whose power is yet to be hooked to the national grid well over five years since their completion.

The Auditor-General Nancy Gathungu has flagged energy producer KenGen’s idle projects worth Kes99 billion after audit failed to find value for the money invested because the projects are not generating revenue for the company.

The idle projects include Kes4.5 billion transmission lines, which presently serve a different company, and Kes79.3 billion invested in drilling wells whose power is yet to be hooked to the national grid well over five years since their completion.

Kenya Electricity Generating Company Plc (KenGen) continues to service a loan in respect of the transmission lines project which were done in the fiscal year 2008/2009, heaping pressure on costs without registering any revenues from the investment, Ms Gathungu noted.

The power producer secured the Kes79.3 loan from the Export-Import Bank of China for the drilling of the wells between 2011 and 2015.

The firm has, however, continued to service the loan and but no corresponding revenue has been booked because the wells have never been connected to any plant for the generation of electricity.

KenGen remains non-committal on when the connection is likely to happen.

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Further, the Ms Gathungu put to question inflated costs for the construction of a building known as Hydro Plaza.

According to audit records, construction of the building started in 2010 and currently has a balance of Kes78.6 billion worth of works in progress.

“A review of procurement records revealed the works were initially awarded at a cost of Kes150 million but the contract was terminated on non-performance and subsequently awarded to another contractor at a contract sum of Kes261 million, an increase of Kes111 million,” abridged report of the auditor general said in part.

KenGen financial year results for the fiscal year ended June 2021 earned a qualified opinion after the firm failed to factor depreciation in value of its assets citing Covid-19 disruptions

“The delay has been mainly attributed to the implications of Covid-19 pandemic since the qualified experts are domiciled outside the country, and the complex procurement process of such a service,” the audit note said.

Ms Gathungu, however, noted that a tender has been awarded to a foreign consultant after re-tendering and the valuation is expected to be completed by the end of this year.

Also put to question is the spending of Kes645.9 million incurred on feasibility studies of Meru wind power project as well as Karuro Hydro Power Plant which KenGen was unable to provide reasons for the delay in conclusion of the studies over eight years since they were started.

KenGen reported values of property, plant and equipment at Kes356 billion in the year ended June 2021.

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