Kenya Electricity Generating Company (KenGen) managers faced intense scrutiny from the National Assembly’s Public Investments Committee on Commercial Affairs and Energy over questionable recruitment practices and delayed asset transfers.
The session on November 11, chaired by Pokot South MP David Pkosing, examined the Auditor-General’s report on KenGen’s financial statements for the period 2020/21 to 2022/23, and raised concerns over breaches of the Constitution and the company’s internal human resource policies.
The Auditor-General flagged KenGen for hiring 10 employees, including four graduate engineers, in 2020/21 without advertising the positions, contrary to its human resource policy, which mandates openness, fairness, and equal opportunity in public appointments.
A similar approach was used to hire 28 graduate engineers the following year, sourcing candidates from the company’s internal HR database rather than through open advertisement.
“The failure to advertise for the positions contravenes both company policy and the values of public service,” the audit report stated.
KenGen’s Principal Secretary, Alex Wachira, defended the move, stating that it was necessary to quickly deploy engineers to international drilling projects in Ethiopia and Djibouti.
“We were under pressure to mobilise engineers for these projects. Any delay would have resulted in penalties or reputational damage. We used our HR database, which contains applications from the public through our website, internships, and career centre,” he said.
Committee members, however, questioned the legality and fairness of the approach.
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Chairman Pkosing questioned the authority to select candidates from a database rather than through open advertisement, asking whether this approach meets the fairness standards outlined in the constitution.
Wachira assured MPs that all current positions are now being advertised internally and externally in compliance with the law.
The committee also probed a Ksh5.3 billion asset relating to the Olkaria IV and I AU substations, which KenGen built in 2015 but has been operated by Kenya Electricity Transmission Company (KETRACO).
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The Auditor-General noted that the novation agreement transferring ownership to KETRACO had not been signed at the time of the audit, although the facilities were already in use.
Wachira confirmed the issue has since been resolved, with the National Treasury taking over the associated loan and the novation agreement signed as of June 30, 2024.
Another concern was the KSh5.9 billion impairment recorded in KenGen’s books, including a full KSh2.1 billion impairment of the Muhoroni Power Station.
The Auditor-General cited the expiration of the power plant’s Power Purchase Agreement (PPA) in April 2023, noting the company had not factored in ongoing negotiations for an extension.
Alex described the impairment as a “prudent accounting decision” and said the extension had since been cleared by the Ministry of Energy.
Chairman Pkosing reminded the KenGen team that public institutions must uphold 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 table a report recommending stricter enforcement of recruitment procedures and enhanced oversight of state corporation asset management.
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