Riddle Of Sh300M Fake Kenya Power Metres

There was an explosive controversy between Kenya Power technical staff and engineers over the quality and accuracy of 60,000 electricity metres that were recently imported from China at an estimated cost of Sh300 million, The Weekly Review can reveal.
It is an episode that raises several pertinent questions, especially with regard to consumer pro- tection. When different teams of technical staff and engineers arrive at different conclusions about the technical integrity of electricity metres, who between the two teams of technical staff and engineers should the con- sumer believe? Where is the assurance to the ordinary consumer that the metre is not faulty?

These questions are pertinent because Kenya Power itself re- cently made pleadings at the High Court, where it disclosed that it had been facing an unprecedentedly large number of cases of metre failure. In the court battle, the utility firm was pitted against a cartel of Chinese manufacturers and local entities that assemble the gadget from kits imported from China.

Indeed, procurement of metres and transformers has been rid- dled with accusations of corrup- tion. Over-ambitious connection targets spawned unfettered purchase of Chinese metres, whose quality was questionable. In 2018, two managing directors of Kenya Power and 19 procurement staff were arraigned in court to face prosecution for procuring low-quality metres and trans- formers and for outsourcing line construction and other related services to non-qualified,unregis- tered firms.

The details of the latest controversy are as follows: Last year, KPLC awarded a contract to Hexing Electricals Ltd of Hangzhou, China, to supply it with metres. The Chinese company successfully performed and delivered on January 27. As is customary, a three-person acceptance com- mittee was appointed and tasked to conduct laboratory tests on the metres. The members of the team were James Ndegwa, Nancy Wairimu Mungai and John
Kinyua. Testing of the metres at KPLC’s lab commenced immediately after delivery while inspec- tion was conducted on February 3.
As it turned out, this techni- cal team rejected the metres after finding that the ‘customer in- terface unit’ (CIU) and ‘measuring control unit’were not functioning properly. With this development, the expectation was that the metres would be rejected.
It did not happen. Instead, the General Manager for Sup- ply Chain and Logistics, Dr John Ng’eno,appointed a new four-person team to conduct separate tests on the metres. The new technical team consisted of Peter Wanyonyi, Benson Dianga, Patricia Nthenya and Vincent Hassauna. In a surprising twist, it arrived at the conclusion that ‘the metres can be accepted and issued for use in metering customers’.

Still, a closer scrutiny of the rec- ommendations of this second team shows clearly that their acceptance and endorsement of the metres from China was qualified. They said: “The monitoring of these metres should start soon after they are deployed for confir- mation if behaviour is consistent with the samples we tested.”

The team also recommended that laboratory tests were not enough, suggesting that future tests for functionality features whose testing conditions cannot be fully simulated in the laboratory be authenticated by additional tests on site before they are ac- cepted.This second recommendation flies in the face of reason because KPLC in 2019 went to the rooftop to announce how it had invested hundreds of millions of shillings in a new laboratory. The company touted the facility as the only accredited lab for testing en- ergy metres in East and Central Africa.

In yet another twist, the KPLC management decided to disregard and ignore the findings of the four-person technical team that had rejected the metres from China as of low quality. Even more intriguing and in order to disguise the fact that a disagreement had emerged between technical teams over the integrity of the Chinesemetres,themanagement decided to create a third acceptance committee, this time putting the two teams together.

Clearly,it was an arbitrary move made to give the impression and pretence that the technical integ- rity of the Chinese metres had been agreed upon by the majority and that differences of opinion arising from laboratory tests can be hidden by arbitrarily harmonising the findings.

This saga begs the following question: Whose responsibility is it to independently monitor accuracy of data and the proper functioning of metres? Whose job is it to ensure that the consumer is protected from faulty electricity metres? In a sense, it does not surprise that the metres from Chi- na turned out to have quality and technical integrity issues.

It has emerged that Hexing Electricals was allowed by KPLC to cir- cumvent a key quality test and procedure right from the beginning,at the manufacturing stage. The Weekly Review has seen correspondence showing that KPLC wrote a letter to the Chinese company taking the unprecedented decision of granting a waiver for Factory Acceptance Tests. “We have granted you approval to manufacture metres and to invite a technical team from KPLC to conduct factory acceptance tests.

However, due to acute shortage of metres, we are waiving the requirement for factory acceptance tests to shorten delivery times,” said a letter by Dr Ng’eno dated December 19,2022.

Factory acceptance testing helps
verify that newly manufactured and packaged equipment is of the required quality. Long-standing vulnerabilities in the supply chains of metres, transformers and poles has been identified as one of the reasons why KPLC is in financial straits.

An internal audit conducted in July 2021 could not even reconcile rudimentary data on the number of metres purchased, the number of installed metres that were not vending and metres that were recorded as faulty. Many ex-Kenya Power staffers who had been engaged by the company as contractors were found to be holding huge stockpiles of pre-paid metres, which they were selling directly to post-paid customers.

Many pre-paid metres could not be found in locations where they were validated within the ERPsystem,whileillegalconnec- tions were found to have genuine Kenya Power metres that had been validated in the company’s ERPsystem. This messy situation spawned a bigger problem,namely excessive buying of metres. The total loss of control over supply chains of this critical product was happening in the context of entry into the space of plants assembling Chinese metres that are co-owned by the Chinese and politically inf luential locals.

Over time, Kenya Power had become dangerously dependent on a little cartel of metre suppliers. Until the group lodged a case at the appeals tribunal under the name‘The Energy Metres and Assemblers Esso- ciation’, it had not become appar- ent that what was at play was an official cartel.

Last year, the company was engaged in an explosive legal dis- pute, with the petitioners pushing it to relax new stiffer rules on the quality of metres. The petitioners are arguing that the new rules amount to discrimination and are meant to lock local assemblers out of the lucrative con- tracts for metres.

On its part, Kenya Power has maintained that it has been experiencing an unprecedented level of metre failures from gadgets purchased from the Chinese
and their influential local patrons. Kenya Power suspended 59 senior staff in its supply chain division to pave the way for a forensic audit into their dealings and the company’s procurement systems. Many months later, the suspended staff were all allowed to resume duty.

(Weekly Review)