Spanish firm’s account frozen in Turkana power line dispute

Power lines: Ketraco recently terminated contract over a debt row. FILE PHOTO | NMG
A Kenya power technician at work in Nairobi. Ketraco recently terminated contract over a debt row. FILE PHOTO | NMG 

Isolux Ingeneria SA, the Spanish firm whose deal for the construction of the Sh15.7 billion Turkana-Suswa power line was recently terminated by the Kenya Electricity Transmission Company, has now had its local bank accounts frozen following a row with one of its sub-contractors over a Sh1.1 billion debt.

Justice Louis Onguto has ordered that Isolux Ingeneria’s accounts with Barclays Bank #ticker:BBK, Credit Bank Limited, Bank of Africa, Ecobank and KCB #ticker:KCB be frozen until he has determined a suit filed by Congolese sub-contractor Enterprise Generale Malta Forrest which has claimed Sh1.1 billion.

Congo’s Enterprise has sued Isolux for allegedly refusing to pay it the amount in respect of sub-contracting works it did on the Turkana-Suswa power line project. Ketraco terminated Isolux’s contract in August after its parent company filed for bankruptcy in Spain.

Isolux has since filed a suit challenging Ketraco’s decision to terminate the deal and call up bank guarantees of over €19.9 million (Sh2.4 billion).

The Spanish firm’s woes have now increased following the demand by Enterprise Generale. A local sub-contractor, Tamani Enterprises, has also separately sued Isolux demanding Sh95 million for works done on the power line project.

Isolux has however obtained a court order allowing it to access Sh30 million, after negotiations with Enterprise Generale. The Spanish firm wants the freeze on its accounts lifted, arguing that the Enterprise Generale lied to the court to obtain a court order.

“During a meeting held at Isolux’s offices attended by Xose Rial and Pablo del Omo representing Isolux with Enterprise Generale’s representatives Marc Arneke and Christopher Fierers, the said Xose Rial reprimanded Enterprise Generale for seeking Ketraco’s intervention and threatened that they may decide to wire any payment made to Isolux to Spain and not pay the amount owed,” Enterprise Generale says.

Isolux now says that Enterprise Generale’s suit is full of malicious falsehoods and that the freeze order, if not lifted, could see the firm collapse.

Ketraco, after terminating Isolux’s contract, stated that the Turkana-Suswa power line was 60 per cent complete but is yet to announce how it will proceed with the Sh15.7 billion project.