Big companies named in Kenya Power bills fraud

A Kenya Power substation. FILE PHOTO | NMG 

By PATRICK ALUSHULA
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Summary

• Kenya Power has in the past indicated that it loses more than Sh500 million per year to illegal connections and vandalism of its system.
• The revelation returns focus on the electricity distributor less than a year after nine of its managers were suspended over graft allegations.
• The company also suffered a bout of negative publicity as thousands of customers complained of inflated power bills.
• The DCI list also includes faith-based organisations- Holy Cross Fathers, Dandora Catholic and SDA Church- showing the extent of the rot.

Big companies have been named among 5,000 Kenya Power customers facing criminal investigations over suspected electricity billing fraud, pointing at possible loss of millions of shillings by the State monopoly.

The Directorate of Criminal Investigations (DCI) Thursday named the Nairobi Women’s Hospital, Moi University, Eldoret Polytechnic, Uchumi Supermarkets, National Oil Corporation and Safaricom Investment Co-operative Society among the entities being investigated over the power bills scam.

“The DCI is currently investigating allegations of fraud involving millions of shillings in Kenya Power in regards to the billing system (postpaid)," said John Kariuki in a statement signed on behalf of DCI boss George Kinoti.

"The funds were lost as a result of conspiracy between Kenya Power staff, brokers and some Kenya Power customers where over 5,000 customers benefited."

Kenya Power has in the past indicated that it loses more than Sh500 million per year to illegal connections and vandalism of its system.

The revelation returns focus on the electricity distributor less than a year after nine of its managers were suspended over graft allegations.

The company also suffered a bout of negative publicity as thousands of customers complained of inflated power bills.

The DCI list also includes faith-based organisations- Holy Cross Fathers, Dandora Catholic and SDA Church- showing the extent of the rot.

South Nyanza region has the majority (70) of firms and individuals facing investigations followed by the North Rift with 34.

Nairobi West has 24 cases while Nairobi North and Nairobi South has 23 and 18 cases respectively. West Kenya, Central Rift, North Eastern and Coast regions have 10, nine, nine and seven cases to be investigated.

Kenya Power last month demolished Oyugis market in South Nyanza where traders had illegally connected power to about 300 stalls.

The DCI has given different dates, running from July 1 to July 30, for the different customers named in the scam to report at the DCI headquarters for interrogation.

The individuals under probe face a fine of up to Sh5 million or a ten-year jail term.

The State monopoly’s profitability has been under pressure despite recording a steady growth in customer numbers boosted by the Jubilee administration’s campaign for universal power connection.

Vandalism, meter tampering and power theft through illegal connections have, however, stood in the way of the company’s revenue growth.

In the financial year ended June 2018, the company said it had added 578,808 customers to hit a total of 6.761 million, a growth that acting CEO Jared Othieno attributed to the Last Mile Connectivity effort. Basic revenue, however, grew by just three percent to Sh95.5 billion from Sh91.95 billion during this period.

Kenya Power said the mushrooming of illegal lines and theft of power had caused it losses. A total of 497 security operations were conducted across the country during the year, leading to 88 arrests.

Customers have complained of inflated bills especially on the post-paid meters, putting the electricity firm under pressure to increase its pricing transparency.

Rising customer complaints saw Nairobi lawyer Apollo Mboya sue Kenya Power before the case was settled out of court. Kenya Power said about 2,600 customers who had presented their grievances were assisted.

Kenya Power has mounting debts to deal with, having already breached the terms attached to Sh59.96 billion worth of short-term and long-term loans as at end of June last year.

Its total debt stands at Sh115.87 billion, of which Sh16.8 billion is repayable in under 12 months and Sh99 billion has maturity period longer than a year.

From a 10-year low profit at end of June last year, it posted a 16 percent slide in half-year profits to Sh2.46 billion at the end of December as operating expenses went up.