Ngumi task force has work cut out

Let’s start by looking at the composition of the recently appointed power purchase renegotiations task force.

The appointment of John Ngumi as chairman sends the signal that the task force is coming with political will from the very top. Yes, he has solid credentials as an investment banker with top- drawer banks.

But Mr Ngumi’s strongest credential is in the fact that he is usually deployed by the movers and shakers within President Kenyatta’s administration to tasks where stakes are high for them. His strong links in the corridors of power were amply demonstrated last year when he was appointed to spearhead the formation of the immensely influential Kenya Transport and Logistics Network.

This is an entity that was created, out of the blue, by an executive order to synchronise the operations of three strategic infrastructure parastatals —namely, the Kenya Ports Authority, the Kenya Railways Corporation and the Kenya Pipeline Company.

Under an arrangement the three key agencies were made to account to the hitherto moribund Industrial Commercial and Development Corporation (ICDC). Mr Ngumi occupies the pole position as chair of a board comprising the chairmen of the three strategic parastatals.

On the face of it, the fact that the gazette notice appointing Mr Ngumi and his team was signed by the Head of the Public Service, Joseph Kinyua, ought to be of little significance.

But in the context of what would appear to be surreptitious attempts by wielders of effective power within President Kenyatta’s administration to sideline the Ministry of Energy from control of the process of renegotiating the power purchase agreements, you start joining the dotted lines.

Early this month, a similar power purchase agreements renegotiation team was appointed through a gazette notice signed by Energy Cabinet Secretary Charles Keter.

Hardly a week later, Mr Keter beat a hasty retreat, forced by heavy undercurrents to dissolve that committee. In that gazette notice, Mr Keter had appointed a Mr Owiti Awuor — who is a middle level manager working within Kenya Power’s legal department — as chairman. Another senior Kenya Power management staffer, Patrick Mawala, was also on that team.

Clearly, the of the Head of Public Service’s entry on the scene was one of the signs of attempts to keep away one column from the power purchase renegotiations process. It is also telling that literally all of the 13 names that appeared on Keter’s gazette notice were left out of the Ngumi-led task force.

Enough of conspiracy theory. What are the big issues here? Mr Ngumi and his task force must take a common sense approach. I read from the terms of reference of the committee that one of the things it is required to do is to investigate compliance with the law with the aim of terminating contracts that may have been done irregularly.

Since the government relied entirely on unsolicited proposals to procure the merchant plants and because there were no auctions or bidding rounds, the perception out there is that corruption was a big factor in the dishing out of these contracts.

Where the task force can demonstrate that contracts were obtained through corruption, Mr Ngumi and his team must recommend termination.

Independent power producers (IPPs) will take the position that every word in their contracts is sacrosanct. Unilateral action to change contract terms could amount to expropriating rights as well as breach of contracts.

But we must strike a balance between obeying the letter of the law and the economic realities which our people are living through. Consumer prices are the highest in the region despite the fact that the taxpayer has spent billions of shillings in this sector.

Just go to the external debt register and you will appreciate the size of energy sector loans we have taken ostensibly to de-risk the sector for these merchant plants. We are at a point where the build-up in excess capacity charges is making the situation worse for the inefficient Kenya Power.