Kenya Power’s Kes44 billion last mile project was left unsupervised creating expensive ghost meters and falling short of the programme targets.
The Auditor-General said Kenya Power bought pre-paid meters from the Chinese at Kes1 billion some of which have never vended electricity for three years.
The power distributor had a target of connecting more than a half a million customers but so far has only managed 213,432 after spending staggering 63 per cent of project cash.
The Auditor-General revealed that the Africa Development bank (AfDB) funding the project has released Kes28 billion out of Kes44 billion but Kenya Power had only achieved 41 per cent of its targeted 525,796 customer connections.
Part of the problem, the auditor discovered was that a consultant, who had bagged Kes274 million for supervision, had disappeared into thin air.
“The company procured consultancy services for supervision and management of civil works and installation of meters at the cost of Kes274.3 million,” the Auditor-General Nancy Gathungu said.
“However, site visits by the team revealed no evidence of consultants personnel’s presence at those sites raising doubt on whether they had been deployed as per the contract,” she said.
The Last Mile project was part of Jubilee Government’s ambitious attempt to connect millions to the national grid by 2017 but its implementation has been rocked by scandals of fake meters, connections that have never vended electricity and increase in illegal connection leaving the utility firm with billion in debt without requisite revenues to repay the loans.
Kenya Power took huge debts that are part of its current problems saddling the distributor with huge repayment costs.
The utility firm is so indebted that it is insolvent meaning if all creditors wanted their money its assets are not enough to repay back the loans and suppliers.
The company has current assets of Kes49.6 billion against current liabilities of Kes116.1 billion.
This means the power distributor has a negative working capital of Kes66.4 billion which leaves it at the mercy of creditors and in violation with Capital Markets Authority regulations for listed companies.