Kenya Power, the country’s sole power distributor, is on its deathbed, despite warnings about systematic management failures that have seen it sink into losses.
While losses are inevitable in any business environment, financial failures at the Nairobi Securities Exchange-listed utility firm are artificial and could have been averted, if various audit reports in the public domain are anything to go by.
For instance, the procurement inefficiencies that have seen the firm pile huge amounts of dead stock is pure negligence by the management which ought to be punished. It is obscene for managers to keep buying stock year in year out without a clear plan.
The fact that the idle stock rose to Sh10.7 billion form Sh8.6 billion a year after the board raised an alarm and gave clear instructions to the management to offload the pile is unforgivable.
To worsen the matter, the country is still witnessing power interruption either due to ‘lack of generators’ and other accessories or use of third-grade materials from unknown sources in India and China.
Apart from idle stock, power theft perpetrated by staff in cohort with rogue high power users and uncollected revenue from millions of customers are issues that must be addressed.
The above matters together with sketchy power purchase agreements have made electricity costs unbearable, stifling growth in the manufacturing sector, with spiral economic effects slapping households hard.
Kenya Power is a strategic asset that needs to be jealously guarded. After retiring costly PPAs, a serious forensic audit, debt restructuring and overhaul of the clumsy management must be undertaken to resuscitate it.