MPs grill KenGen boss over hiring breaches, Sh5.3 billion asset transfer
In 2021/22, the company recruited 28 graduate engineers using its internal HR database instead of conducting open recruitment.
Kenya Electricity Generating Company (KenGen) top management came under intense scrutiny on Tuesday from the National Assembly’s Public Investments Committee on Commercial Affairs and Energy over irregular hiring practices, delayed asset transfers, and the accounting of key energy infrastructure.
The session, chaired by Pokot South MP David Pkosing, reviewed the Auditor-General’s findings on KenGen’s financial statements for 2020/21 to 2022/23. MPs raised concerns over possible violations of constitutional principles and the company’s internal human resource procedures.
More To Read
- Audit uncovers Sh13 billion irregularities in Ketraco wayleave payments
- CS Wandayi, senators clash over county wayleave fees in Energy Bill debate
- Kenya records highest electricity imports as domestic supply dips
- Government proposes special levy on fuel, electricity to fund energy projects
- Kenya Power profit falls to Sh24.5 billion despite higher electricity sales
- MPs slam KETRACO over Coast power project delays despite billions in funding
The audit report revealed that KenGen hired 10 employees, including four graduate engineers, in the 2020/21 financial year without publicly advertising the positions, breaching its HR policy and Article 232(1) of the Constitution, which requires fairness, openness, and equal opportunities.
In 2021/22, the company recruited 28 graduate engineers using its internal HR database instead of conducting open recruitment.
“The failure to advertise for the positions contravenes both company policy and the values of public service,” the Auditor-General’s report stated.
Managing Director Eng. Peter Njenga explained that urgent staffing needs for international drilling projects in Ethiopia and Djibouti motivated the approach.
“We were under pressure to mobilise engineers for the Ethiopia and Djibouti drilling projects. The contract required immediate staffing, and any delay would have led to penalties or reputational damage,” Njenga said. “We used our HR database, which contains applications from members of the public through our website, internship programmes, and our career centre.”
Committee members questioned whether this method met legal and fairness requirements. Chairman Pkosing pressed the MD to explain the legal basis for bypassing open advertisement.
"What gives you the authority to pick candidates from a database instead of advertising openly? Does this meet the fairness test under Article 232?” he asked.
Ganze MP Kenneth Tungule described the hiring policy as exclusionary.
“That policy is very wrong. It locks out many qualified Kenyans who have no idea that such a database exists,” Tungule said. “It only opens room for nepotism. Advertising would not have taken long to get competent candidates.”
Njenga said urgency and company procedures justified the decision, but assured MPs that all current positions are now advertised internally and externally in full compliance with the law.
MPs also sought clarity on a Sh5.3 billion asset related to the Olkaria IV and I AU substations, which KenGen constructed in 2015 but which KETRACO has operated.
The Auditor-General noted that the novation agreement transferring ownership to KETRACO was unsigned during the audit, despite the substations being in use.
“The National Treasury officially took over the associated loan and signed the novation agreement as of June 30, 2024. The financial asset has now been extinguished from our books,” Njenga confirmed.
The committee further discussed the Sh5.9 billion impairment recorded in KenGen’s accounts, including a Sh2.1 billion full impairment of the Muhoroni Power Station.
The Auditor-General observed that the plant’s Power Purchase Agreement (PPA) expired in April 2023, and pending negotiations for a two-year extension were not included in the financial statements.
“Although we have received clearance from the Ministry of Energy for a one-and-a-half-year extension, the process was not concluded by June 2023. Once the extension is finalised, we will review the impairment in line with accounting standards,” Njenga said.
Chairman Pkosing emphasised that public institutions must operate with transparency and accountability.
"These institutions handle assets and opportunities that belong to Kenyans. They must uphold fairness and accountability at all times,” he said.
The committee is expected to present a report recommending stricter oversight of recruitment processes and improved management of state corporation assets.
Top Stories Today
