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"speaker_name": "Mr. Kipchumba",
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"legal_name": "Joseph Kipchumba Lagat",
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"content": "Mr. Temporary Deputy Speaker, Sir, I stand to support this Bill. There is confusion amongst some of our hon. Members because when the word \"regulation\" is mentioned they tend to think that it means \"price control\". The era of price control is draconian and history. We cannot, again, go back to the era of price control as a country. We need to move forward and encourage competition. If we really want to bring down prices, we should encourage competition at all times. The best way to encourage competition is to ensure that entry requirements into the market are made as cheap as possible. That is the only way this country will access cheap energy. We can access cheap electricity, for example, by ensuring that there are very many competitors in the distribution and generation of electricity. I believe that, that is the only way. We can never, as a country, think that by controlling prices, then prices will come down. Indeed, if the Government undertook to control prices, very many oil companies will be smiling to the bank. This is because companies will be assured of a certain margin. Right now, there is no single company that is assured of a margin because none of them is sure of the competition that exists. Mr. Temporary Deputy Speaker, Sir, I heard many hon. Members argue that prices in western Kenya are lower than prices in Mombasa. The reason for this is basic. It is because if you go to western Kenya, the Kenya Pipeline Company (KPC) has installed facilities for loading of petroleum. If those facilities were to be installed all over, including Mombasa and Nairobi, very many marketers would access petroleum at very low prices. It is true that the pump prices would then be low. I have seen the proposal by the Minister that the strategic reserves of the KPC will be funded by the Government. If that will be done then the entry requirements in the petroleum market will be very cheap. As it is now, for you to benefit from the pipeline service, you must put in a line fee of up to Kshs70 million. This is a very high figure that very few companies will be able to afford. I have not seen in this Bill the role of Kenya Bureau of Standards (KEBS). I thought that we pay KEBS so that they can ensure that proper standards are maintained. Some of the products that are sold in this country, if you travel all over the world, should not be in the market. Those are some of the issues that we must take KEBS head on. In the first place, it was established to ensure that proper standards are maintained. We have products with very high sulphur and lead content being sold in this country. Those products must never be sold in this country. Mr. Temporary Deputy Speaker, Sir, we must establish the Fuel Levy Fund. As much as Kenyans contribute towards this fund through the use of petroleum, that money is never used for the purpose it was intended. I would like the Minister to consider using money from the Fuel Levy Fund for exploration purposes only. For us to discover petroleum, which is a very expensive venture, we must ensure that there are continuous funds through the Fuel Levy Fund. Such money should not be used for anything else apart from exploration services. Many at times, I have heard the Minister for Finance and others talk about the private sector playing a critical role in this country. However, the private sector must be allowed to participate in the establishment of storage facilities. The biggest problem that we have in the petroleum industry is the unavailability of adequate storage space in Mombasa. Mr. Temporary Deputy Speaker, Sir, very many companies incur demurrage costs in Mombasa as a result of shortage of storage and discharge facilities. We cannot, as a country, have only one discharge facility in Mombasa. What happens if it breaks down? It means, that as a country, we can never receive petroleum. So, the Government must think very seriously of establishing a second discharge facility in Mombasa so that in case one breaks down, the other one November 22, 2006 PARLIAMENTARY DEBATES 3899 can be made use of. In fact, the reason why petroleum prices are high is because demurrage costs which are incurred by companies are passed on to the consumers. We must rethink as country as to whether we should continue to use only one facility since Independence. I think it is time that the Government sets aside some amount of money so that, maybe, crude oil can be discharged from a different facility and white products can be discharged from a different facility so that we can save a lot of money on demurrage costs. Mr. Temporary Deputy Speaker, Sir, many hon. Members have talked of liberalisation of the oil industry. People do not understand that the petroleum sector is only partially liberalised. It is not completely liberalised. We do not want to go back to that era when there were shortages. I have looked at the Bill and in the establishment of the Commission, that the Minister in his own wisdom, has said that there should be some Permanent Secretaries for Finance and Energy and the Director-General. Then he says: \"The Minister will appoint five other Commissioners\". Why can we not be very specific? Why would we want to give a leeway that there will only be five other Commissioners? From where? Where are the representatives of the energy sector? I would want to believe that this Commission is supposed to serve both the consumer and the investor and, therefore, we can never have a Commission that is only going to serve one sector. Therefore, I would want to suggest that we must have representatives of the energy sector because the energy sector also has its own other bodies. The oil industry has the Petroleum Institute of East Africa (PIEA). Why can we not consider having a representative from the PIEA being picked from amongst themselves so that their interests can be taken care of? Secondly, there are no representatives of the consumers. We must also decide that there must be representatives of consumers so that the issue of consumers can be dealt with adequately by this Commission. We should not have Government officials being in the Commission. I mean that will defeat the purpose for which we are establishing this independent Commission. If indeed most of the members of the Commission are Government representatives, then we lose the purpose for which we are establishing this Commission. Mr. Temporary Deputy Speaker, Sir, I have seen the requirements that many of these officers will require 15 years experience. I want to agree with many of my colleagues that 15 years is a very long time and that requirement must be reduced. I have said in this House many at times that indeed the Controller and Auditor-General is the only person mandated by the Act to appoint auditors. It can never be a board of any commission or a board of a parastatal that has power to appoint an auditor. The Controller and Auditor-General will appoint auditors if indeed they themselves cannot carry out the audit. That was passed by this House but every Bill that comes to this House has the same mistake which we correct every time, that the board will appoint the auditors. Where did the board get the power to appoint auditors? Therefore, that is something that the Minister must re-look into so that he does not bring to us issues that do not make sense. Mr. Temporary Deputy Speaker, Sir, Clause No.23 says: \"The Commission may appoint committees or agents as may be necessary or expedient for the better carrying out of the objects and purpose of the Act.\" That indeed the Commission will wake up one day and appoint agents or committees for the carrying out of certain activities without following the Public Procurement and Disposal Act which was passed by this House. We must never give the Commission power to wake up one day and decide to appoint agents and committees as they deem fit. We must always follow the law and, therefore, I do not subscribe to the idea that we give power to the Commission to just decide who they should appoint to be agents because then we will be perpetuating a situation where the Commission can, in their own wisdom, appoint their own relatives, incompetent agents and committees. Therefore, I want to suggest that during the Committee Stage, that must be removed so that they follow the Act that we have passed in this House because we can never as a House be passing rules and laws that we cannot follow as a House. Mr. Temporary Deputy Speaker, Sir, on the issue of rural electrification, I would want that 3900 PARLIAMENTARY DEBATES November 22, 2006 indeed the Government uses the expertise that exists already in the Ministry of Energy. The Ministry of Energy has very competent officers in the Rural Electrification Department. Many of these Members of Parliament will easily point out that there are competent officers in that Ministry so that the first place that we should \"fish\" out for expertise would be the Ministry of Energy. Creating commissions is very expensive. If it were not that we want an independent Commission, I would have said that it be run by a department of the Ministry of Energy because they have done it so well and there is no reason why they cannot do it even better. Mr. Temporary Deputy Speaker, Sir, I want to say that it must be provided in law that KenGen and any other generating company must do four things. One, they must be able to protect their environment. Secondly, they must re-plough back some of the resources that they get to the communities from where they undertake their activities because we have seen in the generation of hydro-energy, many of the people who live in those areas do not benefit from the existence of these companies. We must encourage social responsibility. Wherever any generation company exists, they must be able to plough a certain percentage of their profit to the benefit of the communities from where they operate because we look at it this way, that, if it were not for these communities, the water that these companies will be enjoying and using to generate energy would not be there in the first place. Therefore, I want to suggest strongly that indeed we must put into this law, that any of these companies must take up social responsibility because when we opened the energy sector, many of the companies that come to generate power in this country are foreign companies and if we do not put laws in the first place, they will exploit our natural resource. Water is a natural resource. Geothermal energy is a natural resource which exists in this country and it must never be enjoyed by any company to the exclusion of the Kenyans themselves. Mr. Temporary Deputy Speaker, Sir, I want to agree with what hon. Wetangula said that indeed we must have an Assistant Director-General. He suggested two but I want to add three; that there must be an additional one for renewable energy. We must have somebody because that is a department that has been overlooked for a very long time. Although we vote a lot of money for the development of renewable energy resources, I have never seen any such resources developed. I do not know whether that money is returned to the Treasury at the end of every financial year, or it is used for the purposes for which it is voted. Mr. Temporary Deputy Speaker, Sir, I want to conclude by saying that I feel very strongly that the barriers to entry in the electrical and renewable energy sub-sectors, as well as into the oil industry, must be removed. The licensing must be taken over by the Government immediately, so that the entry requirements are made as simple as possible. Indeed, the loading facilities, as they exist in Western Kenya, must also exist elsewhere. Proper standards must be maintained by the Kenya Bureau of Standards at all times. We should never have the lorries that cause accidents and spill fuel on our roads. Substandard petrol stations and other facilities must never exist. If the Kenya Bureau of Standards cannot do its job, Kenyans must be able to take the company concerned to court, and it must be able to pay for the consequences. We cannot continue having lorries that spill petroleum products everywhere, causing accidents and killing Kenyans. That must stop. I am happy that this has been provided for in the Bill. Mr. Temporary Deputy Speaker, Sir, I have seen a provision which says that any public officer who causes the destruction of public purse will be taken to court. That is a very welcome punitive measure. Such public officers must not only pay but they must also be imprisoned. With those few remarks, I beg to support."
}