KenGen boss grilled over Sh52b tender

The Kenya Electricity Generating Company (KenGen) management is on the spot for awarding a Sh52 billion contract to a regional firm it had disqualified.

A parliamentary watchdog committee probing the tender process for the leasing of well-heads generating Uunits took issue with the parastatal's failure to award the contract to the lowest financial bidder as stipulated in the request for proposal and later changed to the highest revenue bidder.

Yesterday, The National Assembly Public Investment Committee (PIC) grilled KenGen Chief Executive Officer Albert Mugo and his managers, including supply chain director Phillip Yego, who appeared before it for allegedly flouting procurement laws.

Of serious concern to the committee is the fact that the key professional staff are individual consultants working for different firms in the US and Kenya.

Incorporation date

They demanded to know why KenGen opted for tendering of the lease under Public Procurement and Disposal Act rather than taking the public private partnership approach putting in mind the lease period of 15 years.

"How did Rentco East Africa Ltd qualify for the leasing contract less than a month after it was disqualified for the rehabilitation contract after the financial accounts submitted failed to match the company's incorporation date?" asked committee vice chairman Kimani Ichung'wa (Kikuyu).

The charged legislators expressed their disappointment with the firm's management after it emerged they advertised for two contracts, which were applied for concurrently.

But what angered the lawmakers, who called for the prosecution of the top managers, was the discovery that KenGen will be paying Sh3.4 billion yearly to a non-existent company.

"The directors of this company are not working for this company. They are licensed under other companies based in Kenya and the United States. This firm is not licensed to handle engineering consultancy. The particulars issued are fraudulent, as documented in the regret letter by the CEO," said committee chairman Adan Keynan (Eldas).

Aldai MP Cornelius Serem took Mr Mugo to task over the credibility of the entire process and sought to know the cost to the taxpayer, taking into account the current exchange rate. "We are seeking clarification from the CEO. How much will we pay for this project in 15 years," Mr Serem asked.

Mugo said the contract will cost Sh52 billion. Ichung'wa, Serem, Kiragu Chege (Limuru) and Chris Wamalwa (Kiminini) demanded for stiffer penalties to be imposed on those implicated with corruption.