Kenya Power Intimacy with Jubilee that won Uhuru’s second term in office

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The controversy with Kenya Power in recent few months have always been hitting our headlines. Not corruption and fraud , all have been associated with Kenya power.

Maybe it is when the Kenyans have realized that this company that supplies us electricity has enjoyed the monopoly that it takes everthing for granted.

The company that supplies electricity to 6.2 million customers, private and corporate has now been revealed to be cooking its financial books in order to please Jubilee.

This cooking of books was prominent in 2017, when President Uhuru Kenyatta was seeking for reelection.

Apparently, Kenya Power went against International Accounting Standards (IAS) and wrongly reported sales, receivables, liabilities and profits. “The electricity distributor irregularly recognized unbilled fuel costs as revenue, setting off a process that saw it manipulate the reporting of other items in its books in the quest to avoid disclosing lower earnings,” says a report in the Business Daily.

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Further, according to auditor general Edward Ouko, had Kenya Power reported its financial performance correctly, it woulf have made Sh. 366.6 million in pre-tax profit for the year ended June 2017, and not the Sh. 7.6 billion it reported.

Economist Robert Shaw further explains that in the revenue account in its annual report and financial statements for the year ended June 2017, Kenya Power showed Sh. 22 billion was billed for “fuel cost charges”. It then confirmed under note 7b (page 143) that “a recovery of Sh. 22 billion (2016, Sh. 12.5 billion) was made”. Yet in clause 20a, page 155, under “receivables” it showed Sh. 10.2 billion as recoverable fuel costs with a footnote stating, “the recoverable fuel costs, currently under a mitigation fund set up by the Energy Regulatory Commission (ERC), to be passed onto the consumers at a later date upon approval”.

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The audited accounts also showed on page 160, clause 27b, an equivalent amount, Sh. 10.2 billion, under “current liabilities” as payable to electricity suppliers, including KenGen. This means that Kenya Power did not pass on the additional Sh. 10.2 billion fuel bill to consumers in FY2016/17, probably under instructions from the government and with the ERC’s knowledge.

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Currently, Kenya Power is running a complicated billing structure that is made worse by 19 per cent technical and commercial losses on the LV network, around 25,000 outages and 250 transformer failures each month.

Do you think the state should be separated from all service providers companies to prevent such cases ?

 

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