A report tabled before the National Assembly has revealed that Kenya lost Ksh4.5 billion due to a botched cross-border electricity powerline project undertaken by a Spanish company.
The deal between Kenya Electricity Transmission Company (KETRACO) and the Spanish contractor, Inabensa, involved the construction of a transmission line linking Kenya and Uganda.
According to the report, the tender for the construction of a 132-kilometre, 400 kV double-circuit powerline from Lessos in Kenya to Tororo in Uganda was awarded to the Spanish company in 2016.
However, the government later terminated the contract, prompting the Spanish company to seek legal intervention. During the court process, the judge ruled in favour of the private firm, ordering Kenya to pay Ksh4.5 billion in arbitration.
Following the court's verdict, KETRACO attempted to appeal the decision in Kenyan courts, including the Supreme Court, but lost at every stage of the case.
KETRACO Managing Director John Mativo, while appearing before the National Assembly's Public Investments Committee, was at pains to explain why the project remained incomplete nine years after termination.
“This is not just about legal costs. It’s about a project that was supposed to connect Kenya to Uganda’s grid. How do we explain to Kenyans that billions have been paid but no power flows?” questioned Pokot South MP David Pkosing.
In response, Mativo told MPs: "We felt the decision was against public interest and pursued every legal avenue, but unfortunately, the courts did not rule in our favour," adding that the National Treasury has yet to respond to a 2020 request for project financing.
The Committee also questioned the KETRACO boss regarding the irregularities in the Loiyangalani–Suswa Transmission Interconnector project.
This is after a 2021 special audit flagged the payment of Ksh10.8 million to a contractor who later filed for bankruptcy, procurement outside the annual plan, Ksh1.5 billion in uncertified subcontractor works, and Ksh26.2 million in materials purchased without valuation reports.
According to Mativo, due diligence was done before the insolvency occurred, adding that after the contractor’s collapse, National Treasury approved a new procurement process to complete the works.
Another concern raised by the legislators was KETRACO’s Ksh2.7 billion in outstanding wayleave compensation to landowners, some dating back years.
MPs warned that delayed payments could trigger lawsuits, escalate costs, and stall projects.
Nonetheless, Mativo explained that delays were due to insufficient Treasury allocations, incomplete documentation, and disputes involving county governments and landowners.
