BREAKING THE MONOPOLY OF KENYA POWER WILL BE BENEFICIAL TO KENYA

A joke is told in minimal dearth of accuracy that when God said let there be light, some primordial Electrical Engineer had already laid all the cabling to effect the miracle of that nascent illumination.

Eons later, nobody captured the essence of society like the son of that same divine engineer, when he took up human personification as Jesus Christ. Not just a virtuoso of a carpenter, he also wore a kaleidoscopically-hueful and feathered cap which cast him in equally exquisite light as a master storyteller of his time. In characterizing human avarice & wantonness, he gave an anecdote of a rich man who owned a vineyard where he employed farmhands. But these were a special breed of humans who when described as dastardly sells them needlessly short! He fenced his priced vintage, put up a winepress and erected a watchtower to guard the premises. A time came when he had to go on an odyssey as all wealthy people are wont to. He gave incontrovertible instructions that during harvest time his servants had the discretion to collect profits in his stead and holding it in trust until he returns for remission. At harvest time, the first servant sauntered in customarily to collect due behoof as he had done over the years but at this particular juncture, he was met by mean-mugging characters who roughed him up to within an inch of paraplegia. The quest was abandoned for the day. A second one was sent who met a worse comeuppance. In mafia-lingo, he was ‘whacked’ (probably watched too many George Scorsese’s Movies)! A third came but was met by a barrage of projectiles, also barely getting away with his life. The owner was at the end of his tether! He in due course, probably on misguided nuances, threw his very own son into this simmering cauldron consoling himself in the false paradigm, “Verily, they will respect my son in paying homage to I, their beneficent employer!” But these were a queer breed of blood-thirsty blackguards. They saw him riding in from the proverbial ‘18!’ In their heart of hearts they averred, “If we killed this boy, we would have this vineyard all for ourselves” as they rubbed their hands in machiavellian glee!’ They seized the young man and disemboweled him without any salutary courtesies. “When the Viticulturist albeit Vintner arrived back from his voyage, do you think he kept the farmhands as employees?” Jesus asked his disciples pensively. “He’ll assuredly cast them off then put them out of their collective misery, a rotten bunch and good riddance,” shot back the response almost unanimously from the disciples. They added that he would have to reassign those duties to better-wired recruits who will only be interested in the red of grape wine as opposed to their compatriot’s life-blood and in the fullness of time give due recompense when it is asked of them by the owner. The Lord was unerring in his assessment. Of course, this entire tale was aimed at the Pharisees & Sadducees who made it their pastime to seek to imprison the ‘son of man’ for treason, heresy and blasphemy but as always public sentiment directed proceedings and they were intimidated by the prospect of fomenting a riot among the peace-loving Jews. They saved their bacons and went on their way for future scheming. Today in antipathy to tradition, I did not digress!

While reading the Business Daily newspaper for the week commencing Sunday, 13th September 2020, one story especially caught my attention. The Headline read — ‘KPLC’s Debt to KenGen hits 23.7 Bn.’ Here is the link for those without time to get the hard-copy paper — (https://www.businessdailyafrica.com/corporate/companies/Kenya-Powers-debt-to-KenGen/4003102-5622800-14nte8oz/index.html) I had to rub my eyes in shock while adjusting my subconscious for the prospect of this figure probably being in Zimbabwe dollars, Tanzanian Shillings or the currency of our neighbours to the Western frontier! By the second paragraph, I had gathered that the figure was in Kenya Shillings and was beside myself with indignance. How could this be? Even the figurative ‘traveller in Jerusalem’ did not require a Calculator to surmise that Kenyans suffer under the yoke of some of the heaviest power tariffs in Africa.

For some historical perspective, Kenya Power & Lighting Company (KPLC) was founded on a bright and audacious day on 6th January 1922 and existed as East African Power & Lighting Company (EAP&L) despite origins in Kenya when the Mombasa Electric Power & Lighting Company merged with Nairobi Power & Lighting Syndicate in that same year. Further back in 1875; the enlightened Sultan of Zanzibar, Seyyid Barghash procured a diesel generator to light up his palace and adjacent streets. A similar contraption was acquired by Mombasa’s serial entrepreneur, Harrali Esmailjee Jeevanjee leading to the aforementioned Mombasa-based outfit in 1908. Copying from the same script, that same year Eng. Clement Hirtzel was granted exclusive rights to supply the Capital city with power. Here is the genesis of the also foreshadowed Nairobi Power & Lighting syndicate. In no time, loosely translating to 1932, the EAP&L grew wings and flapped them hard to expand outside our boundaries to acquire the Tanganyika Electricity Supply Company Limited (today called TANESCO) making it a subsidiary. A generation and distribution license was soon obtained for Uganda in 1936. A mere 12 years later, ground was ceded in Uganda when the need for autonomy occasioned the formation of the Uganda Electricity Board (UEB). On the First day of February 1954, a subsidiary of the greater unit called Kenya Power Company (KPC) was inaugurated and commissioned to construct the transmission line between Nairobi & Tororo, Uganda. Power was already generated at the Owen Falls Dam which needed to be evacuated to Kenya to create additional utility in that commodity. That same year, EAP&L became a listed company on The Nairobi Securities Exchange. It was a pioneer among its peers listed publicly on the bourse. EAP&L exited Tanzania in 1964 selling its stake to ‘Jamhuri ya Muungano wa Tanzania’ — the aggregated Tanzanian State.

As the entity only remained in Kenya, a rebranding was in order and was newly-christened Kenya Power & Lighting Company (KPLC) in 1983. Consistent with growth; 14 years later Kenya Power Company de-linked from the greater KPLC, later rebranding as Kenya Electricity Generating Company (KENGEN) handling not just Power Generation but both Primary and Secondary Transmission. Come 2008; and concomitant with the agenda of further stratification, the electricity transmission infrastructure function was carved out of KENGEN and given to yet another scion of the big tree, the pristine Kenya Electricity Transmission Company (KETRACO). A further rebranding was done in June 2011 as KPLC became shortened to Kenya Power (KP) with the sole mandate to handle distribution, metering and retailing of electricity to consumers in Kenya. Needless to say, this is an instance of a Monopoly. Ideally, Monopoly is a form of market capitalism which exists where the elasticity of demand is low and significant barriers to entry become rampant which is relevant to our situation in Kenya presently. Further expansion birthed the Geothermal Development Corporation (GDC), Rural Electrification and Renewable Energy Corporation (REREC), the Nuclear Power and Energy Agency (NuPEA) and the Energy & Petroleum Regulatory Authority (EPRA) all with distinct autonomy and authority for their respective functions.

This may prima-facie seem to be a lovely fairytale to regal young ones to sleep. However; in actual sense, the story of KPLC chronicles a great river which was strong and buoyant at its spring but got muddled at the confluence between mismanagement with the tributary of ineptitude, a rivulet called embezzlement, a stream called tribalism and the brook of political convenience before eutrophication into an insufferable and pungent swamp. Asked today, I can aver with unshrivelled conviction that tribalism is the overarching policy direction at the power utility. The marriage of convenience between the two parties that formed the Jubilee Government will go down in history as arguably the biggest impediment to Kenyan unity ever. Two characters that decided to split Cabinet, Government Department and State Corporation positions between themselves in absolute reticence to the existence of the other 42 tribal entities in our nation. This is actually a longstanding problem that was initiated during President Kibaki’s regime when head-honchos at the Ministry of Energy and its rank and file was from Central Kenya. The problem was inherited and got entrenched under Mwai Kibaki’s successor. Today, do not be surprised if you were to call the Kenya Power headquarters at Parklands and hear people conversing in their vernacular, a series of high-pitched, rapidly-disseminated syllables before answering you in pretty laissez-fare fashion, giving you no assistance whatsoever and without a modicum of courtesy in antipathy to not just the exorbitant rates we have to pay for power in Kenya but also debasing your diligence in initiating the call as a troubleshooting mechanism.

Adjunct to this bilge is the drawback of your political affiliation because in Kenya, politics and tribe are apparently interlinked qualities. It is an open secret that Kenya Power fundraised for the Jubilee Government re-election war chest in absolute disregard to not just professional ethics but also International Accounting Standards & natural justice. This level of iniquity would ostensibly seem like a fable I concocted were it not laid bare by the Former Auditor-General, Edward Ouko in his post-audit report on the financial position at KP that was rife with misrepresentation & ‘doctored’ books. How they stayed as a listed company at the bourse with all these financial anomalies only points to the impunity & state grip over the corporation. That means that as long as you are connected to the national grid and pay your power bill then it’s a certainty that you financially bankrolled the Jubilee Party machinery and paid through our nose we did then, lest we forget! A time was when success card-like chiming became the entertainment in my house when my prepaid meter was guzzling tokens in no dissimilitude to a stray piranha gormandizing tilapia in a fishpond! I am equally hard-pressed to explain why a career legal professional is at the helm of our Power retailer. Many will adduce the rationale that it is in a managerial capacity, all with the need to streamline the company’s activities with legal frameworks as pertains to the current constitution albeit the rules, regulations, presidential edicts, acts and by-laws governing our nation and attendant gobbledygook!

I feel the time is ripe to inquire how many Law firms out here are run by either Engineering Graduates or Career Engineering Professionals?

How many Engineers represent clients in Court or even in arbitration tribunals with regards to resolving actual engineering conundrums?

Could Engineers be ‘losers’ and ‘suckers’ who need to shepherded by other professions?

I neither feel the predilection to mention names here nor disparage anybody’s character but I must question how someone whose Academic and Experiential background does not entail courses in Material Science, Physical Electronics & Electrical Engineering Materials, Electrical Machines and even Power Electronics will hold court in discourse about the most efficient materials to use for Power Transmission cables (the eternal Copper vs Aluminium debate), how to prevent Transformer windings from being cannibalized by scrap-metal dealers or even why we use mineral as opposed to vegetable oil for transformer arc extinction & cooling; tantamount to that, why use of air-cooled transformers as opposed to their oil-cooled counterparts is gaining traction?

My message is that our rulers must adjudge ethnicity, mediocrity and political correctness as subordinate to actual competence and have meritocracy as a yardstick for service. Additionally, professionals should stick to their lanes to eschew the current spate of incompetence.

I have belaboured the subject of Corruption and will not stop in my intransigence against this vice as long as there are still keys on my Laptop and a conscience ensconced within my cerebral cortex’s grey-matter! Corruption is no stranger at this State Corporation as the turn of the millennium beckoned criminal proceedings initiated by the House of Commons in the United Kingdom. Matter of factly, the case is still being prosecuted at a Jersey Court but paradoxically gathering dust at our very own Attorney General’s chambers where in 1986, then KPLC Managing director Samuel Gichuru in concert with Energy Cabinet Minister Chris Okemo were involved in a heist that entailed the building of a phantom hydroelectric power project on the nondescript Ewaso Ngiro river. The two diverted in excess of KShs. 520 million, the proceeds of kickbacks to the tax-haven of Jersey after receiving a flurry of bribes from interested companies. On June 21st 1990, the British Export Credit Guarantee Department (EGCD), an entity that bolsters British Companies to win tenders abroad oversaw the advancement of a £68.1 million loan by ANZ Grindlays Bank to the Moi Government for this endeavour. Under unclear circumstances, the money was diverted to some shadowy entities in the tax-haven jurisdiction of Jersey in the British Isles. Evidence of graft was clear but a series of questionable gaffes from our ‘Mr. Nolle Prosequi’ a.k.a then Attorney-General, Amos Shitswila Wako meant the extradition circus is still on show at the theatre of the absurd to this day! If you needed an indicator on how foreign companies astride our autochthonous entities are willing to pay a premium to access highly-prized tenders and contracts, then this is a smoking gun for you. About 520 Million shillings was seized and repatriated back to the Kenyan exchequer; nevertheless, we will still have to repay for the non-existent infrastructure project, making remittances from 1986 until the end of this year for a project that was supposed to have brought forth 3 new dams by 2007 but a dustbowl is all we can show for it! Let me not even push you to precipitous cliffs of nausea by a feasibility study that cost the taxpayer in excess of 3.8 billion in our legal tender. This is a clarion call for all that were demented that the Nyayo-era was the golden-age of sound stewardship in Kenya merely because they were naïvely lulled into a false sense of eternal gratitude by the Nyayo School Milk Program! I bet Nikola Tesla who did more for Power Transmission but died penniless must be turning in his grave seeing 2 undeserving iterations of scum profiteering from public funds.

Then there is the small matter of the single off-taker for all our Installed Generated Capacity that is solely Kenya Power (KP). For those not abreast with Electrical Engineering jargon, an off-taker is a buyer of generated electricity whether solar, hydroelectric, geothermal, wind, thermal, nuclear or renewable energy who in civilized jurisdictions is a public company, private party, business, school, a cement manufacturer, municipality or a utility company. In our case; only KP, the utility supplier exists. Installed Generated Capacity is the nominal or the intended full-load sustained output of a power plant or all of them cumulatively in a country. The suicidally overenthusiastic, inexorably ambitious but pathologically ill-tooled Jubilee regime in 2013 hatched a plan to raise Kenya’s Installed Generation Capacity to over 6,700 Megawatts in just 40 months. Little regard was given to technocrat counsel on creating demand in terms of building more industries or if ultimately that generated power would be cheaper; subsequently, the fruits are clear for all to see. Moreover, extortionately large loans to develop network so as to add more mostly rural consumers roiled the mix further. In 2013 we had euphoria-fuelled, grandiose dreams of new industries, Electric trains on our SGR line, Resort cities and Special Economic Zones that were to be power guzzlers. Monumental projections coupled with our self-styled ‘hustlers’ who in real sense are nothing more than ravenous kleptomaniacs saw a deal-signing frenzy that brought on board independent power producers, breaking ground for mega-generation projects and portended doom for the distributor now firmly stuck in a loss-making rut. This is all in the backdrop of small-time, single-phase, domestic consumers having to pay exorbitant charges merely to light the house for only a few hours at night!

Adjunct to this point is Kenya Power’s overenthusiastic diving headlong into Power Purchase Agreements (PPA) devoid of any Build-to-Own strategy or even feasibility on the expected demand before increasing capacity. We are now trapped in expensive, long-term PPAs with prohibitively-priced and foreign-owned thermal power producers some of whom do not commensurately pay corporate tax for their revenue, feel the compulsion to employ our annually churned-out graduates or even engage in Corporate Social Responsibility for the adjacent community. I could speak about the engagement of a Corporate Lawyer to look for loopholes for the engagement of a Force Majeure to terminate contracts that are detrimental to the best interests of ‘Wanjiku’ who has to spend astronomically for electricity. However, that is the main impetus of this stratum of society to continue driving Bentleys, go to the Maldives on holiday, charter chopper rides for their baby-mamas to Zanzibar to see the sunset & host private all-white parties. This is all the windfall of casting a blind eye to this injurious state of affairs.

More often than not the easiest thing in the world is to castigate the next man for their failings not just with zero introspection on your own culpability for the misadventure but also failing to provide a suitable suggestion for a remedy that is more valuable than the censure anyway. Here is a raft of solutions I propose:

• Devolve to smaller units at Counties/ Sub-counties — In years gone by, when KPLC was still amalgamated as one big, happy family with its progeny, their inefficiencies could be mitigated by those other appendages performing exceptionally. But these failings have progressively been ruthlessly exposed after the various composite units found autonomy. Devolution as has already happened with many of our water supply companies and authorities will work wonders for the electricity sector. In this model, the power distribution infrastructure should be managed by County or Sub-County Service Board while revenue by means of electricity bills and service charges be collected by the local branches of the Power utility company. Simple acts of secondary distribution, managing substations, last-mile connectivity and repairs will then be within the purview of local technicians within the jurisdiction as employees of that local utility service provider. Decentralization of revenue collection will pass muster with regards to accountability as each county will work to be self-sufficient in this new reality that is the devolved units. That well-worn adage about collective responsibility being nobody’s responsibility will be dealt the death knell.

• Allow Competition as this is pivotal for sensible pricing — This one though impossible to execute presently due to price regulation for electrical units consumed being a function of EPRA, will also be a much welcome move. Today despite the existence of the Energy Act (2019), Kenya Power enjoys a monopoly which she abuses by running roughshod over her erstwhile clientele who have no recourse. Indeed, as the current PS. for Energy & Petroleum, Dr. (Eng.) Joseph Njoroge when serving as CEO of KPLC once opined in derision, “KPLC isn’t so much of a monopoly as many of you think, simply pay your bill or defect to our competitors, darkness!” Such high-handedness from the power utility is the modus operandi in the absence of any competition. Just a mere 10–15 years ago, Cement was retailed for an average of Kshs. 800 per bag when only Bamburi Cement and East African Portland Cement Company existed. The advent of competition from new players has drastically brought down the prices to an average of sh. 550 per bag. Why can’t this level of free-market economy be allowed to attract new entrants as utility service providers? As per the strictures of the Energy Act (2019), with sufficient financial muscle you can actually start a power distributorship in Kenya. However, how feasible is it? Unless you are Jeff Bezos, few actually even try as the Capital Expenditure to build a network, even for a small village is steep. So much so, you will not even recoup your investment and break-even in 10 years’ time of business. Such expenses can only be shouldered by a government-sponsored entity that can pitch abroad for infrastructural loans or mobilize funds from local tycoons via Treasury Bonds. This coupled with market inflexibility of the unit-cost controlled by EPRA means price is uniform hence, proffering nobody an advantage. This will hinder investment in the absence of an open-market dictated by market forces.

• Time is ripe to allow Private Contractors to assist Kenya Power in their operations. As a Telecommunications Engineering professional I can attest to the operability of this model. In our line of work we have Mobile Phone Service Providers like Safaricom, Airtel and Telkom Kenya. The economics of business dictate that they are not able to hire hundreds of thousands of employees into their labour force in spite of the Service Level Agreement to supply and maintain their signal countrywide. That is where Private Contractors come in. They set up shop, get equipment and manpower, be in good standing with the Service Provider and then bid for tenders & contracts. On a need basis, the contractor’s labour is sought to add to the capacity of these service providers as they work to promote the insignia of their contracting entity countrywide. This is a win-win model because additional masts and coverage means additional revenue for that service provider and the labour by the contractor is also richly rewarded in business acquisition as they are paid for executing their side of the contract. Consequently, the service provider will not have to hire the technicians directly but still get their business over the line. This will be a much-welcome model for our Power Utility Company as seldom is a small repair job executed in timely manner these days. In case of an outage, powerline cut or transformer fuse getting charred, repairs take an eternity. Woe unto you, if when they arrive, the wooden pole is found rotten. They don’t look at the job twice! More agony awaits if the Transporter lorry or Bucket crane has broken down. That may be a fortnight of darkness for the aggrieved party! I will not even speak about the backlog of new connections that lie pending for fear of getting apoplectic and failing to finish this post! The only feasible route to handle this is by sub-contracting such services to these many young men & women out here that sit jobless on qualifications in Electrical Grid Construction and maintenance. I feel the incorporation of contractors into this sector will ease managing distribution, new connections and maintenance shortfalls. “Hii pesa yote hamwezi maliza pekee yenu KP!”

• Cease Charging Consumers Capacity Cost — There is a disconcerting state of affairs that despite KP & KENGEN being in concord for the bulk of a century, the new upstart still insists on levying Capacity cost for their Generating Stations despite breaking even an eon ago. This is just ludicrous! How do I explain to my 3-year-old niece that we are still offsetting Capacity Cost for Kindaruma Dam Power Station that has been in operation for 52 years in this month’s power bill? This is just hyena-like behaviour that has to stop.

• We need Serious Investors in Electrical Power & Industry — The problem with Kenya is that the ruling class, our deep-state, the grizzled old-rich with deep pockets are now more interested in monkey business nay musical chairs as opposed to trans-generational investment for the sake of the future of our motherland. I have heard in the grapevine, but from reliable sources that a few well-heeled ‘foxes’ only seek to enter the power distribution business by acquiring licenses only to then sell them to foreigners at a premium. Lack of serious investors is a weighty matter that can only be addressed by ordinary ‘wananchi’ taking the bull by the horns in co-operative movements whereby pooling resources together, they will be able to create new entities to rival the status-quo. Even well-known tycoons like my good friend and mentor Dr. (DJ.) CK are still running around selling shares of old companies, hedging in derivatives and futures market as opposed to giving back to society by funding local ventures. But it is their money, so who am I to disparage their actions? We need more industrialists and venture capitalists as opposed to antiquated serial entrepreneurs not just in the power industry investment but also for the creation of industrial capacity for the uptake of the already acquiesced Installed Generation Capacity. This is supposed to be a noblesse oblige of sorts by the privileged class to the hoi-polloi.