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Debt-Stricken KPLC Planning To Purchase New Cars Worth Ksh379 Million

by Wycliffe Nyamasege August 28, 2019, 10:26 AM 1.9k Views 1 Comment

The Kenya Power and Lighting Company (KPLC) is in the process of acquiring new cars that will cost the company Ksh379 million, Kahawa Tungu has learnt.

In a tender notice that was approved in July, KPLC is set to purchase the cars from four different suppliers.

Toyota Kenya, which was given the highest tender, will be supplying the company new cars worth Ksh241.54 million.

Other cars dealers are Simba Caetano Formula, Isuzu East Africa and Simba Corporation which signed Ksh52.66 million, Ksh51.26 million, and Ksh34.4 million deals respectively.

The revelations come at a time the company is lurking in huge debts.

Read: Ken Tarus Ousted From Stima Sacco Board Over Corruption Cases

Reports indicate that KPLC currently has loans worth Ksh59.6 billion which have left the management with no option but to opt for fresh short-term loans to service long-terms loans.

“We are beginning to renegotiate part of the loans and convert them into long-term debt to bridge the negative liquidity gap,” said Jared Otieno, Acting Kenya Power Chief Executive Officer.

Otieno was appointed in June by Energy Cabinet Secretary Charles Keter, to replace KenTarus who is facing economic crime charges.

Tarus was charged alongside his predecessor Ben Chumo and 12 others with conspiracy to defraud the parastatal of over Ksh409 million.

They reportedly purchased substandard transformers from Muwa Trading Company. The officials have also been accused of aiding fraudulent acquisition of Ksh202 million as payment for the supply of the transformers.

The huge money owed to creditors has led to the company halting several projects across the country.

The financial challenges facing KPLC informed the decision to halt the signing of new power purchase agreements (PPAs) indefinitely.

Despite the company revenue rising by 4.23 per cent to 125.8 billion shillings during the 2018 financial year due to an increased customer base, a huge junk of the revenue was suppressed due to higher costs during power purchases.

This led to the decline of the net profit to 1.9 billion by the end of June.

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