Attorney General (AG) Justin Muturi yesterday indicated that his office was not informed when Kenya Power entered into contracts with Independent Power Producers (IPPs).

The AG said current challenges regarding termination of contracts would not be an issue had the said agreements been forwarded to his office for perusal.

Appearing before the energy committee investigating the high cost of power in the country, Muturi said that his office will only advise on whether to terminate the contracts or not, once all the details are available in his office.

The IPPs have been blamed for the high cost of power in Kenya, and despite efforts by previous administrations to address the issue, not much has been achieved.

“We are just being told that it will be expensive to terminate the contracts but nobody is telling us by how much. We must know the consequences of terminating these contracts. Nobody has ever come up with figures of what to pay when we terminate these contracts, perhaps what we have been paying for the last five years is enough to cover the entire cost. Maybe the best option would have been to take over the equipment,” he said.

In his submissions Muturi said there is no way the individuals behind the IPPS can continue to operate incognito and still benefit from public money.

He however told the committee that his office had been informed that a team in the Ministry of Energy is currently looking at possibilities of renegotiating the contracts with the IPPs or terminating them.
He said: “Foreign companies must declare who the owners are according to Companies Act 2015 and beneficial owners must register with the Registrar of companies.”

He added: “IPPs that have not disclosed beneficial owners should be prosecuted.” 
Following the move Muturi told the committee to recommend that the Directorate of Criminal Investigation (DCI) investigate IPPs that have not disclosed names of beneficial owners as this is against the law.

Immediately he was done, the MPs demanded that the contracts be terminated to cushion Kenyans from high electricity prices. Committee chairperson and Mwala MP Vincent Musyoka said there is need for them to evaluate the PPAS.

He said that investigations have shown that last year, 70 per cent of power came from KenGen while IPPs accounted for 30 per cent of electricity produced.

He however said 70 per cent of the total amount paid by Kenya Power went to IPPs while Ken Gen only got 30 per cent of the cash.

“The IPPs charge us separately for capacity charge which runs into billions yet capacity charge involves generators which are supposed to be provided by the IPPs,” he said.

 Nambale MP Geoffrey Mulanya proposed that those who signed the deals take personal responsibility for the billions that could already have been lost.

“I am taken aback by the helplessness that the AG is showing, if we have to cancel the contracts then those who signed must take responsibility.” He said.

In July, the Central Organisation of Trade Unions (COTU) asked the government to revoke all Power Purchase Agreements with IPPs and renegotiate better terms.  COTU secretary general Francis Atwoli said IPPs have to be tamed to address the high cost of electricity.
In April, two Independent Power Producers Thika Power Limited and Iberafrica Power blamed the soaring prices of Heavy Fuel Oil for the high cost of power in the country.