Yesterday evening, the entire independent directors at the board of power utility firm Kenya Power & Lighting Company PLC resigned.
“The Board of Directors of the Kenya Power and Lighting Company PLC hereby announces the resignation of Mr. Adil Khawaja, Mr. Kairo Thuo, Mr.Wilson Kimutai Mugung’ei, Mrs. Brenda Kokoi and Hon. Zipporah Kering as Independent Directors,” a statement signed by the Company Secretary stated in part.
According to sources, the directors resigned out of frustration, problem with tariffs, failure by GOK to adjust the tariffs and failure to allow balance sheet restructure.
“Without a tariff increase KPLC cannot turn around”, one source privy to the matter said.
KPLC has been on a loss-making streak over the past few years running into billions, and as such experts argued that tariff increase alongside sealing loopholes that have made it possible for graft to reign in the firm is key in a turnaround strategy.
In July 2019, KPLC announced that it lost over Ksh.35 million in power tokens irregularly sold to customers between January 2018 and February 2019.
In December 2019, an investigative report revealed that rogue Kenya Power staff had given access to the company’s systems to non-staff to manipulate bills and engineer fraudulent tokens. The loss according to Directorate of Criminal Investigations (DCI) amounted to a loss of Sh58 million in the year 2018.
Bombarded with questions on why power bills had risen astronomically, Kenya Power at some point claimed that the inflated bills were as a result of migration to the Integrated Customer Management System and the backdating of bills in order to recover an outstanding Sh10.1 billion owed by customers.
In February 2020, Kenya Power reported a 92 per cent fall in net profit, from Sh3.26 billion to Sh262 million in the year to June; the lowest in 16 years.
In July 2020, the firm reported a loss of Sh5.6billion in revenues between March and June, citing low power consumption due to the pandemic.
“Between March and June 2020, electricity consumption declined by about 14.8 percent corresponding to a decrease in energy consumption by about 341 GWh. Consequently, electricity sales revenue reduced by about KSh5.6 billion,” energy Cabinet Secretary Charles Keter had told a local news outlet
While announcing the biggest loss in February, Kenya Power revealed that it had made an application to the regulator for an increase in electricity prices by up to a fifth, saying it is key in reversing its reducing profitability — which has seen its earnings drop for three years in a row.
As of yesterday, the regulator, Energy and Petroleum Regulatory Authority (EPRA) had not agreed to KPLC’s demands.
The resignation of the five board members also brings to sharp focus the alleged restructuring the govt is said to be planning.
Kenya Pipeline Company (KPC) board chairman, Mr John Ngumi, who also sits at the board of struggling Kenya Airways (KQ) is said to be eyeing a position at KPLC in a series of restructuring carried out by the Jubilee regime.
Ngumi, a darling of tenderpreneurs, recently distanced himself from ‘lobbying for positions’, in an interview with the Nation Media Group, however, Kenyanbusinessfeed.com has established he is likely headed to KPLC.
Mr Ngumi and Michael Joseph, the Chairman of the board, have failed to turnaround the airline. Michael Joseph had been added 3 more years in 2019 at the same time Ngumi was elected into the position.
The seasoned investment banker Ngumi is wanted by Tanzania authorities to answer to a Sh600million bribery scandal relating to a government bond.
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