The government shot down a proposal by Kenya Power to single-source three international legal and consultancy firms.
Documents presented in Parliament show that the National Treasury, the Attorney-General and the Procurement Agency slammed breaks on Kenya Power's quest to directly hire the services.
The government shot down a proposal by Kenya Power to single-source three international legal and consultancy firms the utility company had picked to review expensive power purchase agreements (PPAs) blamed for high consumer bills.
Documents presented in Parliament show that the National Treasury, the Attorney-General and the Procurement Agency slammed breaks on Kenya Power's quest to directly hire the services of Michael Sullivan, the Queen’s Counsel (QC) Howard Barrie, and Mr Jude Kearney.
The Treasury further shot down firm’s request to use Specially Permitted Procurement Procedure to hire the services of consultancy firms PriceWaterhouseCoopers (PWC), McKinsey & Company, and Boston Consulting Group.
Kenya Power’s decision to seek the services of the experts followed the March 21 decision by President Uhuru Kenyatta to appoint a taskforce to review PPAs signed between Kenya Power and all electricity generators with a goal of renegotiating the energy prices and other terms downwards.
The 15-member team, chaired by boardroom veteran John Ngumi has recommended a number of reforms including renegotiation of all PPA’s contracts that Kenya Power has signed with electricity producers that also dictate modes of engagement, including payment.
The proposals that are expected to reduce the cost of power by 33 percent – from Sh24 per unit of electricity to Sh16 per unit by December this year.
Kenya Power signed contracts committing it to take more electricity than it can sell, leaving it to pay onerous capacity charges to energy producers even when their plants are idle.
Mr Howard Barrie and Mr Jude Kearney were to be hired to advise KPLC and the Presidential Taskforce on the review of the PPAs and the renegotiation strategy.
PWC was to undertake financial analysis of PPAs, McKinley was to be hired as management consultant while Boston Consulting Group was to offer the taskforce “a wealth of cross-cultural experience.”
Members of the Energy committee, who probed the PPAs, have now questioned why KPLC wanted to bring in the international experts at the time the taskforce was conducting a invetigations into the PPAs.
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