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"id": 233889,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/233889/?format=api",
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"type": "speech",
"speaker_name": "Mr. Raila",
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"speaker": {
"id": 195,
"legal_name": "Raila Amolo Odinga",
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"content": "From this side of the House, we would not like to criticize the Government for the sake of doing so. We are going to make constructive criticism. That means that where we see loopholes, we will point them out so that the Government can plug them. Energy is very important to the economy of a country. It is like the blood vessels or the nerve system on the body. Mr. Deputy Speaker, Sir, I am pretty conversant with the origin of this Bill. The preliminary work actually started under my charge in the Ministry. Overhauling the regulatory framework within the energy sector is long overdue. The need for it was seen when we were in the Ministry. This economy cannot be expected to grow unless we deal with this critical issue of energy. We talk about this country being industrialised by 2030. Of course, what we have done is just to postpone the KANU bench-mark of 2020 by ten more years. As we talk about being industrialised, we must address the issue of the provision of energy. You cannot industrialise without energy. To date, our total installed capacity is only 1,200 megawatts. That is equivalent to the consumption of some cities in Europe. If we hope to industrialise, then we must be more creative in addressing this issue of energy. We know our limitations. I want to begin here with electricity. Our sources at the moment are mainly hydro, petroleum, geothermal and very little of solar and others. We are close to exhausting our hydro capacity when we are talking about mega hydro electric power plants. We need to look at other areas. In as far as hydro is concerned, we still have not exploited the potentials in western Kenya, namely, the rivers that flow into Lake Victoria. There is Sondu Miriu. There are rivers like Kuja, which has not been looked at properly, Yala and Nzoia. There is still capacity in those rivers for power generation. Mr. Deputy Speaker, Sir, we have also been using fuel in thermal power plants. This, of course, is very expensive because it is tied to petroleum products. We know that as the price of crude oil increases, so will the price of the energy generated from those sources. We have not yet fully exploited other sources, for example, geothermal. Kenya is only second to New Zealand in terms of geothermal resources. At the moment, we are just scratching the surface of the potential that we have. We need, therefore, to aggressively explore and exploit the potential that we have in geothermal. The other source is wind. When I was in charge of the Ministry, we completed the national wind-map of this country. There is also quite a substantial potential in wind. For example, in an area like Marsabit, you can generate up to 300 megawatts. Around Turkana, we also have very high wind speeds. If you go to Europe, and I was in Germany just last month, you will see so many windmills all over the countries because it is a very cheap source of energy. The other sources are bio and ethanol. During the oil crisis of the 1970s, this country initiated the construction of ethanol producing plants. One was constructed in Muhoroni and another, which has stalled, in Kisumu. The two plants are now working. In this Bill, there is no mention at all of the use of ethanol. For the information of the hon. Members, it is now mandatory in most countries to use ethanol where possible. Apart from being cheap, ethanol is also a much November 21, 2006 PARLIAMENTARY DEBATES 3793 cleaner source of energy than pure petroleum. For example, in Brazil, they plough to 20 per cent with ethanol. It is possible to do so. One would have thought that our experts in this country working on a Bill like this could not have missed the issue of ethanol. Mr. Deputy Speaker, Sir, I want to declare my interest here because it is important for hon. Members to declare their interests when they are contributing on an issue on which they have interest. The fact is that the Government initiated the construction of these plants precisely because it wanted to do the blending, so that they could use the local raw materials that would also provide employment for the people of this country. It is necessary that at this moment in time, this be factored in this Bill. I mentioned one time when we had a workshop that we must be creative in this and we should not be conservative. We should look at the possibility of going nuclear also. The use of nuclear power for peaceful purposes is universally accepted. Nuclear reactors are capital intensive initially, but in the long-run, they are much cheaper. In Europe, Japan and even the United States of America, they are developing new generations of nuclear power plants. We should look into this. It will be cheaper for us to take a 1,200 megawatts nuclear plant and instal it here. We must be pro- active because all these countries are doing it. Mr. Deputy Speaker, Sir, I was talking, the other day, with President Obasanjo of Nigeria and he was giving me some of the positive things that he has done in the six years that he has been President. He told me that when he took over in Nigeria, the total installed capacity was 1,500 megawatts. From 1999 to 2005, they managed to increase the generating capacity to 10,000 megawatts. They increased the capacity from 1,500 megawatts to 10,000 megawatts within a period of six years. So, I would like to urge the Minister not to be confined to some of the advice which he is going to be getting from the technocrats around him, who are looking at a very small section of this, but he should have a much broader perspective. It is the responsibility of the Minister to tell the technocrats that this is where we want to go. He should not allow himself to be led by the technocrats as far as the energy policy is concerned. He should create the policy and let the technocrats do the implementation. Our aim should not be to double our installed capacity, but to go fivefold in our installed capacity in the next five years. If you come up with a programme that is pro-active and implementable, this is achievable. Mr. Deputy Speaker, Sir, I would like to talk about rural electrification. This is an infrastructure and should be treated just like roads, water and anything else. We know that rural electrification does not pay. In other words, when you talk purely in economic terms in terms of return on investment, it will not pay. We know that by taking energy to the rural areas, it triggers a lot of economic activities there. Therefore, when we are talking about poverty eradication, then we must address this issue of rural electrification. Therefore, when we are talking about poverty, we must also talk about the issue of rural electrification. We must be prepared to take electricity to all the vast lands of our country. That is what will help us to stem the rural-urban migration, because people will be able to set up Jua Kali projects which can generate income for people who live in those areas. So, rural electrification must be done and I urge the Minister not only to look at the rate of returns, but basically at what will happen when power is taken to those areas. We should consider the stand-alone systems which can be created in a number of market centres in this country. The wind and mini-hydros can be put up on small rivers. We can find examples of such projects in Vietnam and Malaysia which have successfully implemented the mini-hydro plants for rural electrification. We want to also ensure that there is some kind of equity in this so that the entire country is looked at, so that we do not concentrate only in what we consider to be productive parts of this country. Mr. Deputy Speaker, Sir, on the issue of fuel prices, I agree with the Minister that we should not go back to the days of price-controls. However, we should regulate effectively and ensure that the cartel that has continued to increase the prices of oil products in this country is 3794 PARLIAMENTARY DEBATES November 21, 2006 controlled. Originally, the intention of creating the NOCK was to facilitate proper competition in the industry so that prices could stabilise. However, NOCK has not been allowed to operate commercially and that is the reason that the multinationals are behaving like cartels. So, NOCK, for a long time suffered from lack of efficient management. Now, we have a Chief Executive who has come from the oil industry and knows the operations of the industry. However, there are still some handicaps and that is the reason why NOCK cannot do what is expected of it. The multinational corporations have a very efficient system of management for operations. Sometimes, even decisions being made here and requiring sanctions from London, New York and Paris, that authority is given within 24 hours. We cannot allow NOCK to compete with BP Shell and Total among others, when decisions are made by bureaucrats who look at their watches and keep correspondence suspended for months, within which time prices change and NOCK is denied to take advantage of the favourable practices. We should completely delink and allow NOCK to operate as a commercial enterprise so that it does not have to refer every decision it makes to the Permanent Secretary because we have a Board which should be allowed to operate independently. If there is a problem, then there are auditors who should audit the Board. Macro-managing the Corporation is what is responsible for the inefficiency in the Corporation. So, let us have a professional Board and professional officers who can compete with the private sector enterprises. Mr. Deputy Speaker, Sir, the issue of competition between KenGen and KPLC is something that the Minister is competent to deal with so that the consumer is not unnecessarily exploited. We equally ask the Minister not to consider the issue of raising tariffs at this moment in time. I think there is sufficient profit being made by those who are in the industry. Other countries have liberalised further generation, transmission and distribution of power. So, this is another area that the Minister may consider to liberalise further so that we delink generation, transmission and distribution. In the USA and several other countries, it has been found to be very beneficial. As far as the ERC is concerned, I have no problem with it. However, I have a problem with the composition and the manner in which the commissioners are supposed to be appointed. We are supposed to delink it from all bureaucracies so as to create an independent regulatory commission. But when you look at the manner in which the commissioners are being appointed, you will see that the Chairman has to be appointed by the President, and the two Permanent Secretaries. Five members of the Commission have to be appointed by the Minister, supposedly from various stakeholders. We need to be more specific so that this is not left discretionally. Therefore, those stakeholders should be named and they should propose names to the Minister. Mr. Deputy Speaker, Sir, secondly, we have reached a stage where we must take cognisance of our geographical diversity in this country so as to ensure that when we are proposing a member to the Commission, we look at the country in general and not just his or her qualifications. Mr. Deputy Speaker, Sir, looking at qualifications is responsible for the disparity in a number of commissions in this country. We have reached a stage where we should factor this in all our Acts; that, when we are appointing members to a commission, we take cognisance of the border picture. In this regard, we should borrow a leaf from Malaysia. In Malaysia, there is a formula in many regions that when you are looking for a person with certain qualifications, you must look for him or her from a certain region. That is the only way we will get an El Molo serving in some of our commissions. So, when we are looking for qualifications and competence, we must look at someone from El Molo. Otherwise, if we continue to look for any individual, we will continue to complain day in, day out. When we are looking at the composition of the ERC, we should also look at what has happened to other commissions so that we are not left with a distorted figure. However, we need to factor, within these Acts, something to ensure that whenever we are making appointments, there is some kind of parity. As far as the independence of the ERC is concerned, we need to have a true independent regulatory commission. The Bill is supposed to liberalise it. November 21, 2006 PARLIAMENTARY DEBATES 3795 Mr. Deputy Speaker, Sir, when the Minister is looking at the prices of petroleum products, he should look at the issue of taxation. Taxation of petroleum products is very high; it is higher than what it costs oil companies to buy crude oil, transport and refine it and eventually distribute the processed petroleum products. Kenyans need to understand that the high cost of fuel in this country is not because oil firms want to make exorbitant profits. It is as a result of very high taxation. The Minister should try and spread the taxation net wider rather than singling out specific products. This is what is hurting the consumers. Mr. Deputy Speaker, Sir, if you look at the price of paraffin, which is highly used by poor people in Kibera, it has gone up nearly three times in the last three years. I urge both the Minister for Finance and the Minister for Energy to look at this factor globally, so that consumers are not made to suffer very much. Mr. Deputy Speaker, Sir, with those few remarks, I beg to support."
}