Kenya Power bosses announce major reforms to restart utility company

Kenya Power board chairwoman Vivienne Yeda (left) and interim CEO Rosemary Oduor at the company’s 100th annual general meeting in Nairobi. [Courtesy]

Kenya Power is on the cusp of a “clean slate” through the overhaul of key processes such as sourcing and asset divestiture as part of ongoing reforms to lift it out of the abyss.

Company president Vivienne Yeda said dirty supply scams and unsustainable projects had ruined the electricity utility and, in turn, shifted the burden to electricity consumers . This, she noted, has denied returns to shareholders for many years.

“Unfortunately, your business had become a sauce for everyone, a vehicle for all kinds of unsustainable and unsustainable projects, business and supply schemes and scams that ended up draining Kenya‘s electricity resources. “Yeda told shareholders at the company’s 100th annual general ceremony. Meeting (AGA) in Nairobi yesterday.

“The financial and economic cost of excessively purchasing overpriced and low-quality goods and services is borne by you, the shareholder, the business owners and the wananchi who need electricity. ”

“This is the reason why shareholders have not received dividends for many years and also the reason why KPLC and wananchi pay their nose for electricity which should be easily accessible to all,” he said. she declared.

Yeda, who has headed the board for 18 months now, said he would “free up” the giant utility company through the implementation of a strict cost management policy anchored on return on investment and the prudent purchase of equipment, as well as by engaging with ethical partners.

“We need to start from a clean slate with developing standards, specifications and procurement frameworks that ensure we get the best quality of goods and services,” she said. It was then that the company sought shareholder approval to review past audits by former senior executives on financial transactions that cost it billions of shillings.

Yeda said the reforms will increase the efficiency of procurement and the quality of equipment, consultants, contractors and further simplify procurement procedures with more flexibility, transparency and use of technology.

Auditor General Nancy Gathungu, in her latest report, exposed procurement challenges at Kenya Power with an audit review of IT systems revealing weak oversight processes that pose risks to the business.

Yeda said Kenya Power has launched “long overdue IT reforms” aimed at improving invoicing, institutional purchasing, treasury operations and human resources activities.

She said the review of power purchase agreements with independent power producers (IPPs) was underway to end the imbalanced agreements. “Let me make it clear that the KPLC is not at war with the PPIs. On the contrary, KPLC is fully aware of the unsustainability of the terms and conditions of existing PPAs, ”she said.

The government recently appointed a committee to oversee planned reforms at Kenya Power, which it had declared a special state project. The state has pledged to lower electricity prices by 33% by the end of the year.

PPAs have been blamed for the high costs of electricity in the country. “It should be obvious that it is not in the interests of either party … that the terms of the PPA be so lopsided as to endanger the existence of any player,” Yeda said.

“Under the current framework, PPIs continue to deliver stellar profits and dividends as your company, the only buyer, and the wananchi struggle to make ends meet.”

The turnaround of the business is based on the customer experience, reducing the cost of electricity, improving sales growth, increasing revenue collection, prudently managing costs and reducing loss of business. system.

Kenya Power Acting Managing Director Rosemary Oduor said the turnaround was paying off in light of the company’s performance and attributed it to increased sales, as well as lower costs of operating and financial.

“The business is reinventing itself to become more responsive to customer needs,” she said.

Kenya Power reported net profit of 1.49 billion shillings through June 2021, an improvement from a loss of 939 million shillings recorded in a similar period last year.

About Bradley J. Bridges

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