KETRACO officials under fire over Sh7 billion Inabensa contract penalty
The controversy revolves around the Lessos–Tororo transmission line, awarded in 2014 to Inabensa to transmit power from the Marsabit wind farm.
Top executives at Kenya Electricity Transmission Company (KETRACO) are facing intense scrutiny from Parliament over a Sh7 billion penalty linked to a terminated contract with Spanish firm Inabensa, a liability that threatens the agency’s financial stability.
The controversy revolves around the Lessos–Tororo transmission line, awarded in 2014 to Inabensa to transmit power from the Marsabit wind farm.
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The Spanish contractor collapsed financially within months of starting the project, causing major delays.
By the time KETRACO ended the contract in 2016, only 55 per cent of the line had been completed, forcing taxpayers to cover billions in penalties, including “deemed energy” power charges that could not be evacuated due to the unfinished line.
Inabensa sued KETRACO and ultimately won through all levels of appeal, prompting Parliament to demand full accountability.
The National Assembly Public Investments Committee on Commercial Affairs and Energy, chaired by Pokot South MP David Pkosing, has warned that if any procurement errors are identified, the responsible officials must bear the cost personally.
“Before you agree to pay, tell the committee to determine the procedure and legality of the procurement. If it is flawed, Kenyans won’t pay, but the officials who handled the contract will,” Pkosing said, adding, “We will never be a conveyor belt of cartels and thieves.”
MPs have questioned KETRACO’s due diligence, suggesting Inabensa may have been financially unstable when the contract was awarded.
They also called for a full audit of legal fees paid to firms representing the company at various court stages and demanded information on their track record in managing KETRACO’s legal battles.
Former KETRACO CEO Fernandes Barasa, now Kakamega Governor, is also under scrutiny because the contract termination occurred during his leadership.
Current KETRACO managing director John Mativo was grilled by MPs over why the agency continues to accrue interest on the penalty.
Nairobi Woman Representative Esther Passaris criticised the contract structure, saying, “The policy in your contract should be such that interest is suspended so that you deal with the principal amount. We lose a lot of money as a country. The beneficiaries are the lawyers and the contractors. It is hurting.”
Kaloleni MP Paul Katana demanded accountability, asking, “Who terminated the contract? Why should Kenyans be burdened by decisions taken by one person who didn’t consider the implications?”
He also questioned the competence of KETRACO’s legal team, saying, “Some of these lawyers play games. How did you source this one to represent KETRACO? We want his track record.”
KKETRACO previously tried to block payments to Inabensa, arguing that the firm’s financial instability could cause irrecoverable losses, but the Supreme Court said it had no jurisdiction to intervene.
The parliamentary committee has given KETRACO a one-month deadline to finalise the settlement and submit a detailed progress report by September 23.
A multi-agency team, including KETRACO, the Energy Ministry, the Energy and Petroleum Regulatory Authority (EPRA), and the National Treasury, is negotiating the settlement.
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