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Inside charged tender wars that edged out Kenya Power chief

BUSINESS
By Roselyne Obala | August 6th 2021

Former Chief Executive Bernard Ngugi before Public Investment Committee in Parliament, Nairobi, on June 15, 2021. [David Njaaga, Standard]

A heated correspondence between Kenya Power chairperson Vivienne Yeda and a senior manager has exposed a simmering tension that preceded the exit of immediate former Chief Executive Bernard Ngugi.

The Standard has obtained email conversations between Yeda and the company secretary Imelda Bore - who also doubles up as the general manager in charge of legal and regulatory affairs - that paint a clear picture of how Ngugi had become isolated in the months leading up to his ouster. 

Ngugi, who the firm said had “resigned” on Tuesday, ending his 32-year stint at the power distributor, was only copied in the emails, although he should act as the link between the organisation and the board. 

The email conversations show that the bad blood between Ngugi and the board was aggravated by several tenders, particularly one on insurance brokerage and a proposed restructuring programme.

These fights would in the end earn Ngugi low marks from the board in the annual appraisal performance contract, resulting in his premature exit. First, the board voted down a restructuring programme that would have seen the listed power company merge the positions of supply chain manager and that of the power purchase officer. The restructuring was yet to be approved by the State Corporations Advisory Committee (SCAC). 

However, it was on the tender for insurance brokerage services that the board and the management clashed extensively.

At first, the board cancelled the Sh200 million tender, with Yeda pushing for the amount of the deal to be increased to Sh1 billion owing to Kenya Power’s size.  

The board chair argued that the management had not incorporated most of the guidelines that the board had proposed in the insurance tender. 

“Please track the board inputs. I don’t see any changes to the previous specs (specifications). The premium turnover should be a multiple of KP (Kenya Power) premium - not less than Sh1bn. See director Gudka and my comments and any others that the directors shared and refer to the minutes,” wrote Yeda in an email to Bore on July 20. Bore’s response a few minutes later did not assuage the chairperson, who is also the CEO of East African Development Bank.

“We are still waiting for the revised tender specs for insurance and the other project details. Kindly share with the board the template that has been developed on the basis of the government of Kenya guidelines I shared with you,” wrote Yeda in her response. 

Former Chief Executive Bernard Ngugi. [David Njaaga, Standard]

Frustrated by the response, Yeda asked the General Manager in Charge of Supply Chain Kipyegon Ngeno and Bore to send the minutes of that meeting on the day when specifications for the tender were discussed.

Bore would finally bow to pressure, increasing the cost of the tender to Sh1 billion. 

“Board members, we need to guide management and make proposals. My proposal is that the current premium volume of the prospective broker needs to be increased from Sh200 million to Sh1 billion, the guarantee from Sh3 million to Sh10 million and the professional indemnity cover from Sh200 million to Sh1billion. This should be justified based on the size of Kenya Power, the type of risks covered and the level of business being placed,” said Yeda in the email. She emphasised “a solid organisation structure and team with the ability to conduct risk surveys and specific experiences in the energy market locally and internationally”. 

“MD please revert with the specs, urgently given the tight timelines you indicated,” she instructed. On June 17, Yeda sought from Ngugi the details of tenders on the Kenya Power’s website.

“Please send me a brief on the tender on meters, specifically on intended use (location and type of client) number being procured, (price subject to market survey). Is this a Kenya Power project or a donor project?” inquired Yeda.  She added: “There are a number of EOI (expression of interest) that we requested, insurance, medical and motor vehicles. Kindly update and share the TOR (terms of reference) today.” She went ahead to seek the information from Bore who responded, in reference to their earlier conversation. 

“Further to our conversation this evening, you asked for the following, an extract from the procurement plan 2021/2022 showing the major spend items to be procured in July showing the items, the procurement method and the expected spend. We will revert. As indicated, the paper on Medicare will be before the Corporate Governance Committee on Monday 21st June,” wrote Bore. Ngeno wrote to Bore saying he had a conversation with Ngugi regarding the smart meter that is currently running and is supposed to close on August 7. 

“The board chair has directed that we cancel the tender. This is therefore to kindly request you to furnish me with board minutes on cancellation of the same so that I can progress the cancellation to assist me in ensuring that we are within the law on cancellation,” said Ngeno.

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