Kenyans risk $4m loss to bankrupt Spanish firm

Ketraco had entered into two contracts with the Spanish firm for construction of an electricity transmission line and extension of an existing sub-station at Lessos in Rift Valley in April 2013. FILE PHOTO | NMG

By JOSEPH WANGUI

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Kenyan taxpayers are on the verge of losing Ksh4.8 billion ($42.7 million) to a

Spanish firm contracted by the State-owned Kenya Electricity Transmission Company (Ketraco) to construct an electricity line linking the local and Ugandan power grids.

Ketraco lost a second attempt in court to stop paying the foreign contractor, Instalaciones Inabensa S.A, the amount for breach of the contract financed by an African Development Bank (AfDB) loan.

The State corporation, which was found at fault in terminating the contract, has been fighting the payment awarded to the Spanish contractor by an arbitration tribunal on July 30, 2019.

After losing the first attempt at the High Court in February this year, Ketraco asked the appeal court to suspend the execution of the orders of Justice Maureen Odero.

“The contractor is a foreign company, has no known assets or physical place of business within Kenya and it is of questionable liquidity as its parent company, Abengoa SA, has filed for a Voluntary Declaration of Bankruptcy in Seville Spain,” Ketraco informed the appellate court.

But Justices Asike Makhandia, Mbogholi Msagha and Mumbi Ngugi ruled that there was no evidence to show that the contractor would not be in a position to repay the amount should Ketraco’s appeal succeed.