Board, Cabinet Secretary fail to agree on hiring of new KenGen boss

Energy Cabinet Secretary Davies Chirchir.

By Geoffrey Mosoku

Nairobi, Kenya: A standoff between the Energy Cabinet Secretary and the KenGen Board has delayed the appointment of a new chief executive for the State corporation that oversees multi-billion shilling power projects.

The Kenya Electricity Generating Company Limited (Kengen) board recommended to Cabinet Secretary Davies Chirchir to appoint as MD and CEO Albert Mugo, who finished top in the job interviews.

Chirchir, who received the Board’s report on July 26, is yet to respond to the board amid reports that he favours the appointment of an “outsider” as MD.

Mugo is currently director at KenGen in charge of business development and strategy while KenGen Finance and Commercial Director John Mudany was ranked second in the interviews.

Albert Sigei, the vice-president of business support & ready mix operations at the Nigerian branch of Lafarge, the French based multinational cement conglomerate, was ranked third.

Lafarge is the majority shareholders of Bamburi Cement and also hold a major stake in East African Portland Cement.

But the Cabinet Secretary denied claims he is favouring anyone.

“This is a serious organisation where you have to get the most competent and qualified person to appoint as MD,” Chirchir told The Standard but did not elaborate. “I am currently in Arusha, I will give you more information when I am back,” he added. 

Mbathi also sought to downplay the alleged differences between the KenGen board and the ministry over the preferred candidate. “We are together and as KenGen, we operate under the ministry. The decision will be made by all of us,” he added.

The Standard established that the board chaired by Titus Mbathi recommended Mugo, citing his performance in his current duties and for continuity as he has been in charge of multibillion-shilling projects.

Sunday, Mbathi confirmed that the board had completed its work, adding that the new CEO will be unveiled soon. “We are going to make an announcement shortly,” he told the Standard but did not confirm The date.

5,000 megawatts

KenGen is vital to the Government’s plans to increase the country’s power supply from current 1,500 megawatts to 5,000 megawatts and to lower electricity costs significantly in the process.

Currently, KenGen is undertaking various power production projects, the latest being the Sh11.6 billion plant jointly funded by KFW and the World Bank as part of the ongoing 280MW power project in Olkaria, Naivasha. Sinopec International of China was awarded this tender.

Other contracts in the 280 MW geothermal project are power plant construction being undertaken by a consortium of Hyundai of Korea and Tsusho of Japan. Transmission lines and sub stations are being constructed by KEC of India and the overall project management being carried out by Sinclair Mertz of Australia.

Other large projects in the pipeline are Olkaria I Unit 4 & 5 and Olkaria IV geothermal set for commissioning in December 2013.

On June 13, Chirchir halted the recruitment of a new MD as the term of then CEO Eddy Njoroge ended. The Cabinet Secretary directed the board to appoint an acting CEO and the recruitment process to resume once a new Principal Secretary had been appointed.

Tenure acrimonious

“As you are aware, the Ministry will have a new PS before the end of June succeeding outgoing permanent secretary Patrick Nyoike. Given this new development, it’s crucial for Mr Nyoike’s successor to participate in interviewing the candidates shortlisted. Accordingly, you should have the proposed Board interviews rescheduled to the second week of July, 2013,” read Chirchir’s June 13 letter to Mbathi.

The exit of Njoroge from the helm of KenGen was acrimonious after then PS Nyoike overruled the board’s request to have his term extended. He was first appointed managing director of KenGen in March 2003, serving for 10 years at a time when the Government offloaded some of its stake to the public in an initial public share offer (IPO) in 2006 at the Nairobi Securities Exchange.

The government’s 30 per cent stake in the firm raised more than Sh26 billion against a target of Sh7.9 billion.

Regulatory affairs director Simon Ngure is the acting MD and CEO.