Parliament should heed AG Justin Muturi advisory on unmasking IPP cartels

The Energy Committee led by Hon. Vincent Musyoka (Mwala) engaged the Attorney General (AG), Hon. Justin Muturi on the ongoing inquiry into the high cost of electricity in the country.

The Committee sought the AG’s advisory on the legal implications of terminating some of the Power Purchase Agreements and whether the Government can take over some of the power plants in order to reduce the cost on the consumers.

During meetings with various stakeholders, the Committee noted irregularities in Power Purchase Agreements entered into.

“There is the amount that is paid for no generation at all and they say it is some sort of insurance so that whenever we need power, the generators can be switched on”, said Hon. Musyoka.

The Committee raised concerns over the possibility of exploring Mutual Legal Assistance principle in establishing beneficial owners of power companies registered in other countries.

“What options do we have to unearth the Directors of the companies hiding in other names of companies registered outside Kenya?” Hon. Musyoka asked.

In response, Hon. Muturi pointed out that the Agreements were signed without the input or advice of the Office of the Attorney General and that his office needs to know the consequences of re-negotiating or terminating the contracts.

However, the AG said his office will issue an advisory upon conclusion of the technical Committee’s task on reviewing and re-negotiating the PPA’s.

On the Mutual Legal Assistance on Beneficial Ownership, the AG indicated that for that to take effect, there must be an active criminal matter in place.

“The issues raised here haven’t progressed to a level of investigation. However, the process involves DCI, DPP, EACC, AG’s office then Ministry of  Foreign Affairs”, said Hon. Muturi.

The AG urged the Committee to summon the Registrar of Companies to unmask the owners of the IPPs.

Further, he disclosed that it’s in violation of the applicable Law for the Registrar of Companies to claim he doesn’t have ownership information on IPPs.

“Section 994 (4) of the Companies Act states that the Registrar shall keep the Foreign Companies Register at such a place or places as are prescribed in its head office and shall ensure that it is kept for inspection by interested persons during normal business hours of the Register”, stated Hon. Muturi.

So as to fast track the on-going inquiry, the AG urged the Committee to ask for weekly updates from the technical team engaging IPPs on power re-negotiations.

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