Kenya Power and Lighting Company (KPLC) are facing scrutiny over the acquisition of land in Machakos, as revealed by Auditor General Nancy Gathungu.
“Management failed to negotiate with the seller as required under the company policy on acquisition of the company property at a price that was higher than the market value returned by the valuer it had earlier engaged of KES 40 million,” said the auditor general in a statement.
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The audit disclosed that KPLC procured a 10-acre parcel without adhering to proper procedures, rendering the payment illegal. Gathungu emphasized that the transaction lacked approval from the Ministry of Energy and the Treasury.
According to the Auditor General’s report, KPLC bought the land for KES 75 million, surpassing its actual value of KES 40 million. With the intended purpose to construct a substation to enhance electricity supply in Athi River and surrounding areas.
Despite company policy requiring negotiation, KPLC failed to engage in discussions and accepted the higher valuation. The Auditor General concluded that this breach of protocol prevented the company from proceeding with fencing and construction of the station.
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KPLC is grappling with public dissatisfaction due to recent power outages and increased electricity prices and has struggled with a tarnished reputation amid reliability concerns. The company, reported a net loss of KES 3.2 billion in the last financial year, attributes this to rising finance costs.
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