How agency spent billions on malfunctioning transformers

Kakamega residents and Kenya Power technicians keen to have a glance at a faulty power trasformer which exploded yesterday. The transformer has been faulty for quite some time with power technicians checking it almost everyday but yesteday it exploded and blasted into flames shocking county officials and bringing business along Kenyatta Avenue to a standstill. The transformet stands close to Kakamega County Headquaters. However, nobody was harmed. [PHOTO: CHRISPEN SECHERE].

Senior officials at a State agency could have received kickbacks from the suppliers of faulty transformers to look the other way almost a decade.

An internal audit commissioned by the Rural Electrification Authority (REA) board has exposed how the authority has since 2008 bought transformers that have an unusually high failure rate.

Despite the junk status of the equipment, the audit found, the management kept enlisting the services of the same suppliers.

The end result is that REA, which is charged with providing countrywide power connectivity to public institutions under the Last Mile project, has over the past 10 years ended up with close to 2,000 faulty transformers. The audit shows that the management would award contracts to companies without evaluating whether they had the capability to deliver.

It also did not make any attempts to get replacements for the transformers under the warranties given by the suppliers.

“There were transformers that were supplied in the financial year 2013-2017 whose failure rate was beyond REA’s average of five per cent. The transformers that failed were identifiable and traceable to a particular consignment,” reads the audit report.

“There was one instance where a contractor who had supplied transformers that had a disproportionately high failure rate was subsequently awarded a supply contract before due diligence was conducted on them.

Returned transformers

“This resulted in factory pre-manufacturing tests confirming that indeed the supplier did not have the capacity to supply good quality transformers and subsequent recommendation of termination of the contract.

“There were no proper records on the exact number of failed transformers or the reasons of transformer failures. The procurement department received and stored transformers returned from the field due to failures but never required specific information before accepting the returned transformer.”

Among the firms that supplied transformers with unusually high failure rates was Schilchar Technologies of India. According to the report, the firm’s history of supplying faulty transformers to REA began in 2009 when 120 of the transformers it supplied that year alone were reported to have failed. The trend has continued since and between 2009 and 2015, the firm had supplied a total of 445 transformers that all failed in what the audit refers to as a “disproportionately high failure rate.”

Another firm, Dhanlaxmi Equipments PVT Ltd, supplied 251 faulty transformers between 2012 and 2015 while Muskaan Power Infrastructure Ltd sold 267 transformers to REA that also failed between 2009 and 2011.

Both firms are also from India. Different firms, mostly Indian or Chinese, have supplied faulty transformers totalling 1,960 since 2008.