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{
    "id": 1224743,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1224743/?format=api",
    "text_counter": 127,
    "type": "speech",
    "speaker_name": "Suba South, ODM",
    "speaker_title": "Hon. Caroli Omondi",
    "speaker": null,
    "content": " Thank you very much, Hon. Temporary Speaker. With a lot of pleasure, I rise to second the Motion. Let me begin by invoking the words of an African-American writer, James Baldwin. He once said that ignorance allied with power is the most ferocious enemy of justice. I paraphrase him by saying that beauty allied with brain, as the fine lady from Laikipia has just demonstrated, is probably what the doctor ordered for Kenya’s economic problems today. There is something called ‘State capture’. It is where a decision-making authority is appropriated by individuals who exercise that authority not for public gain, but for private interest. The issue of power supply in Kenya is a classic case of State capture. I want to talk about the problem of Power Purchase Agreements (PPAs) and recommend some solutions as we discuss this important matter. The greatest problem that we face in Kenya today with respect to PPAs, is conflict of interest. The decision-makers who have been awarding these PPAs are the beneficial owners of the entities that have been given the contracts to supply power. So, there is no arm’s length in the transactions. We cannot clearly say that there are fair dealings on these matters. There is no transparency because those who are making the decisions are the ones who are benefiting and they are not serving public interests, but private interests. Bribery and corruption are very apparent in the PPAs that we have signed as the Republic of Kenya. I speak from historical experience as the person who wrote the law that separated Kenya Power and Lighting Company (KPLC), Energy and Petroleum Regulatory Authority (EPRA) and the rest. I was the first Chief Executive Officer (CEO) of EPRA and I have a bit of deep domain knowledge on these matters. The procurement processes have not been competitive. We have something called Feed-In Tariff in Kenya, where you just walk in, negotiate a deal, and you are given a contract to supply power. It is not based on competition. It is good to indicate what the tariffs will be, but it must be competitive to get competent suppliers. That is not the case and there is no competition in most of these things. So, we have very expensive sources of fuel instead of using very cheap alternatives like Liquefied Natural Gas (LNG), which should have been procured over the years. There are some things that we may not understand because we are laymen, for example, the long-term nature of PPAs. If you get it wrong at the beginning, you will pay for it dearly. There is something called Capacity Charge or Take-or-Pay Principle. Those are normal and they are not bad, but the problem is we are not matching the established demand with the supply. We, therefore, have excess supply and limited demand, but we still have to pay the Capacity Charge. The reason is that when somebody puts up a power plant, they must guarantee The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}