How nepotism, kickbacks rule Kenya Power tenders

An intricate network of corrupt employees and contractors has put Kenya Power back in the spotlight, following a damning report exposing how companies affiliated to staff bagged multi-billion shilling contracts to undertake emergency repairs on power infrastructure.

The report exposes the deep-seated rot at the power distribution firm, which comes at a time when the company is fighting to redeem its image following claims of customers being fleeced.

The network of employees decides which contractor gets and retains the job.

Kickbacks

A number of contractors that ended up with the job in the October last year’s tendering for Labour and Transport (L&T) are affiliated to the employees. The employees co-own the companies with their spouses, children or other relatives.

“Some of the pre-qualified firms were owned or associated with Kenya Power employees,” says the report by internal auditors.

Kenya Power staff within the circle, who do not have their own companies, get kickbacks to ensure the contractors retain their jobs. Some of the employees forming the cartel are low cadre and include clerks and technicians, who are nevertheless well compensated.

“An examination of money transfers showed a trend where funds were exchanged between directors of the pre-qualified L&T firms and KPLC staff. KPLC employees were found to be working in strategic positions in regard to job execution, hence direct conflict of interest,” say the auditors.

For these corrupt employees, money comes first and despite the sensitive nature of power infrastructure, they have contracted unqualified companies to undertake repairs.

Fatal dangers

In turn, the firms deliver substandard jobs, exposing the over six million households connected to power to untold dangers, some of which could be fatal.

In instances where the employees are not directors of the companies, they have been soliciting bribes from contractors so as to award the tenders.

The audit report shows the employees, who are strategically placed within the company to influence tender award decisions, have been receiving chunks of money from directors of the companies. Kenya Power outsources certain jobs to these contractors, including emergency jobs and change of rotten poles.

The outsourced teams help Kenya Power to undertake urgent work and comprise of pre-qualified contractors, who are then deployed on short notice to respond to emerging issues, including non-scheduled power outages.

When summoned by the Audit Department, the Kenya Power employees owning stakes in the contracted companies would try to lure the auditors, the report states.

“We observed that some directors of L&T contracted firms when requested by Projects Department to come to Internal Audit division to clarify anomalies relating to their firms, sent brokers in an effort to induce the auditors to disregard the anomalies,” says the report.

According to the report, 262 contractors out of 525 pre-qualified to undertake emergency repairs have not been cleared by the National Construction Authority (NCA), despite such certification being basic for companies in that line of work.

This could mean that they are using quacks to undertake repairs.

The companies also appear to be brief case, without physical locations and staff, some presenting KenyaPower employees as their key technical staff.

Blacklisting

“The Kenya Power employees, on being questioned, denied any knowledge or relations with the said L&T firms, alleging that their documents might have been obtained illegally or irregularly without their knowledge,” reads the report.

Kenya Power said it is in the process of blacklisting contractors that have delivered substandard work, failed to submit proper documentation and in certain cases interfered with the tendering process.

The CEO, Ken Tarus, said the company had initiated the audit following customer complaints on quality of work by some contractors.

“After the audit report, the Company has decided to thoroughly investigate all contract work and take appropriate action where need be. This is to ensure that all works given to contractors meet the specified standards,” said Tarus.

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