The Government through Kenya Electricity Transmission Company (Ketraco) will pay Ksh5.1 billion for a contract that was cancelled in 2016.
The contract which had been awarded to a Spanish firm Instalaciones Inabensa S.A. in December 2012, was cancelled in what the government termed as non-performance.
Taxpayers will now foot the bill after Ketraco withdrew its appeal at the Supreme Court that had challenged paying a such hefty sum.
The tender was awarded to the Spanish firm for the construction of a 220kV ring around the Nairobi Metropolitan area.
“The Ring will involve the construction of new 220kV substations in Isinya, Suswa, Ngong, Athi River, and Koma Rock and expansion works in the existing Dandora substation.
“Through the substations, power will then be transferred to and from other parts of the country and even to neighbouring countries like Tanzania, Uganda, Rwanda, Democratic Republic of Congo and Ethiopia,” Ketraco announced during the signing of the contract.
With the company dragging in meeting its deliverables, Ketraco cancelled the contract in 2016 setting the path to a six-year-long legal battle.
The Spanish firm aggrieved by the decision sued the state corporation at the arbitration court at the High Court.
The arbitral tribunal ruled on July 2019, that the government should pay Instalaciones Inabensa S.A Ksh4.1 billion for the cancelled contract and an interest rate of Ksh868 million.
The court further ordered Ketraco to foot legal and arbitrator’s costs incurred during the litigation process.
Ketraco differed with the ruling and filed an appeal at the Court of Appeal on November 20, 2019.
Court of Appeal on October 7, 2022, dismissed the petition by ruling that it lacked jurisdiction to hear and determine the matter.
Ketraco subsequently filed an appeal at the Supreme Court challenging the arbitrator’s ruling.
However, on February 2022, Ketraco withdrew the petition, paving way for the Spanish company to receive the amount awarded on July 30, 2019.
While accepting the withdrawal cost, Supreme Court Judge; Mohammed Ibrahim, Isaac Lenaola and William Ouko ordered Ketraco to bear the costs of the appeal.
