State risks losing Sh60m in cheap gas project

Nancy Gathungu, Auditor-General of the Republic of Kenya. FILE PHOTO | BILLY OGADA | NMG    

By PETER MBURU More by this Author

At least Sh60 million pumped by the government into the

low-cost cooking gas project may have been lost, Auditor General Nancy Gathungu has said, citing faulty cylinders supplied for use in the scheme and poor implementation.

The project, which resumed in 2022 after stalling for years, is meant to wean poor households from the use of dirty wood fuel by providing them with liquefied petroleum gas cylinders, grills, and burners to households at subsidized prices.

The State had by June last year pumped Sh1.12 billion into the project initiated in 2016, but it continues to face several hurdles, including faulty equipment. Ms Gathungu now warns that at least Sh60.9 million spent on the project is at high risk of loss.

Previous audits had indicated that some 79,057 units of 6kg gas cylinders supplied under the project were declared faulty by an independent inspector, following safety concerns raised by consumers leading to the suspension of the project in 2019.

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“The State Department engaged the suppliers who agreed to collect and remedy defective LPG cylinders. However, as of the time of the audit in November 2023, a total of 26,188 cylinders valued at Sh55,344,068 were yet to be remedied even though the suppliers had been paid a total of Sh36,408,218. In addition, one of the suppliers who supplied 11,132 defective cylinders and paid a total of Sh24,479,268 had been placed under receivership,” the audit notes.

In the last financial year ending June 2023, the government spent Sh76.5 million on the project being implemented by the National Oil Corporation of Kenya (Nock ), bringing to Sh1.12 billion, the entire amount spent on the project since when it was started in 2016.

The Sh76.5 million was meant for refilling cylinders for roll out of the Mwananchi LPG project in Nairobi County.

“Review of the records relating to the project and physical verification revealed that some 237,616 6kg cylinders purchased under Module I and 84,500 two-burner low-pressure tabletop cookers purchased under Module II of the project, together with accessories, were yet to be distributed and were lying at the warehouses rented by the State Department and Nock,” the audit also stated.

Ms Gathungu faults the government for lacking policies and frameworks to implement the project, revealing that it has been driving it blindly. She doubts that Kenyans have obtained value for the more than Sh1 billion already spent on the project by June last year.

Read: Funding cuts hit Sh2.5bn LPG project for schools

“There were no project implementation plans, strategy detailing how the project was started, overall sustainability plan, beneficially identification mechanism for the LPG cylinders and low burner tabletop cookers. Further, there was no smart metering service and technical support for dispensing LPG from the source point to consumers who constituted the point of use,” she observed.

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