Why Gathungu doubts Sh431m Ketraco payout
Auditor-General Nancy Gathungu at a meeting in Mombasa County on February 4, 2025.
What you need to know:
- The Auditor-General said recipients of the payouts by Ketraco remained unclear, raising questions on the legitimacy of the payments.
- Ketraco has been implementing construction of transmission lines valued at billions of shillings across different parts of the country.
The Kenya Electricity Transmission (Ketraco) is in the spotlight over conflicting records on how it spent Sh431 million in compensation for land owners displaced by electricity lines from Olkaria geothermal power plants to Kisumu.
Auditor-General Nancy Gathungu said recipients of the payouts by Ketraco remained unclear, raising questions on the legitimacy of the payments.
During the year ending June 30, 2024, Ketraco paid some 172 persons Sh207.5 million for land acquired during construction of Olkaria-Lessos-Kisumu transmission lines, the auditor-general reported.
Audit of the project, however, notes that during the previous year, Ketraco indicated that only wayleaves amounting to Sh27.3 million were outstanding.
“The compensation was paid to 172 project affected persons during the year under review. Previous year audited financial statements reflected outstanding wayleaves totaling Sh27,347,743 resulting to the unexplained variance of Sh180,165,915 paid as wayleave compensation in the under review,” Ms Gathungu said.
The Olkaria-Lessos-Kisumu transmission lines project was started in 2016 and completed in March 2022.
Ketraco told auditors that the Sh27.3 million computation of outstanding wayleave compensation as of June 2023 was based on the allocated budget at the time, with the audit noting that “failure to record all the pending payables balance distorts accounting records.”
In another project, the 220kv and 132kv transmission lines and sub-stations, the audit notes that while Ketraco spent Sh117.68 million on wayleave compensation, only Sh73.5 million had been reported as outstanding the previous year.
“Review of records revealed that the compensation relates to payables for the financial year 2022/2023 and earlier years. However, the previous year's audited financial statements reflected outstanding wayleaves totalling Sh73,501,859,” the audit stated.
“Management explained that the outstanding wayleaves amounting to Sh324,606,257 were outstanding as of June 30, 2023, but the amount of Sh73,501,859 was disclosed based on the allocated budget,” it said.
This left outstanding wayleaves that had not been disclosed by the end of June 2023 totaling Sh431.27 million, with the auditor-general faulting the failure to record them only to pop up last year.
Ketraco has been implementing construction of transmission lines valued at billions of shillings across different parts of the country, and there are plans currently to set up some of the lines under the public-private partnership (PPP) framework.
pmburu@ke.nationmedia.com