Tax payers are losing big ever since the government implemented Uhuru’s austerity measures.
The termination of over five hundred projects meant that tax payers could lose over Kshs 10 billion.
Termination of the Lessos-Tororo electricity transmission line has sunk with Sh5.6 billion, clustering it among the biggest lose of funds in the reported 545 stalled government projects.
Treasury has revealed that Kenyan taxpayers have lost billions in the Sh8.8 billion project which was being jointly funded by the government (Sh3.6 billion) and foreign funding at Sh5.2 billion.
Stalled Capital Projects
According to the Treasury update on ‘stalled capital projects’, the contract was terminated when the development was at 39 per cent, meaning all monies spent now fall on the loss account.
This adds to the woes of the contract initially awarded to Spain’s Instalaciones Inabensa SA, where the Kenya Electricity Transmission Company (Ketraco) was directed to pay Sh2.5 billion after cancelling the tender.
Ketraco, the implementing agency cited “non-performance” during the cancellation.
The Spanish company obtained court orders stopping any further works on the 132 kilometre transmission line, even as it accused the State agency for breaching terms of the contract before unlawfully backing out of the deal.
Appearing before the Public Investments Committee (PIC) last March, Ketraco managing director Fernandes Barasa told Members of Parliament that the Attorney General had advised that the dispute be “settled amicably to avoid a protracted and expensive arbitration process.”
The electricity transmission line is a project of the Nile Basin Initiative. It was expected to advance regional trade in electricity while bridging the shortfall in power experienced in the region.
Foreign funding
Ketraco floated the tender in 2012, paving way for construction which commenced in July 2013, with a completion timeline for 2021.
Treasury PS Kamau Thugge confirmed in the ministry update to Parliament that the project was at zero per cent when it was terminated, which was followed by litigation.
Lessos-Tororo was designed to connect Kenya to Uganda with funding from key institutions including financing from the African Development Bank (AfDB) in various currencies.
Kenya was supposed to put up a 130km 220 kilovolts line between Lesos in Nandi County to Tororo in Uganda, and then link with a similar line to Jinja. The line to Jinja was being constructed by the Ugandan government with a further extension to Rwanda, Burundi and DR Congo. Kenya and DR Congo, however, lagged behind on the initiative.
Ketraco had earlier decried high compensation amount for the affected communities.
In Kenya, the line traverses Uasin Gishu, Kakamega, Bungoma and Busia counties.
During the parliamentary sitting, Barasa told MPs that settlement of the dispute would allow the court to dispense with the case, enabling the State agency to procure a new contractor to complete the project.