House team faults MoU of Sh43b geothermal project

By Martin Mutua

A parliamentary committee has questioned the signing of a Memorandum of Understanding (MoU) between the Government and a private Chinese company for Sh43 billion geothermal project.

And the Energy Departmental Committee chaired by Karachuonyo MP James Rege summoned the Energy PS Patrick Nyoike to shade light on the well drilling project.

Sources at a closed-door meeting on Tuesday, which Kengen Managing Director Eddy Njoroge failed to attend after being summoned, said the issue of how Great Wall Drilling Company (GWDC) won the tender was discussed.

Members questioned why the Government entered directly into an MoU, with the private company as opposed to the Chinese Government. Consequently the committee queried the 20 per cent escalation drilling cost, which has translated into the increase of the electricity cost in the country. "The committee was of the view that the electricity prices will not go down with the escalation of the prices to drill the wells, which the private company has slapped on the project," added another source who attended the meeting.

According to the documents, the Government through the Ministry of Energy has entered into an MoU with GWDC for provision of drilling services and supply of materials for Menengai geothermal field phases I and II.

The committee wondered why the Government was seeking financing through the Chinese government in form of preferential Export Buyer’s Credit or Concessional Loan for drilling of steam exploratory.