HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 91455,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/91455/?format=api",
"text_counter": 96,
"type": "other",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "Thank you, Mr. Deputy Speaker, Sir, for giving me the opportunity to contribute to the 2010/2011 Estimates of Development and Recurrent Expenditure of the Government of Kenya for the year ending 30th June, 2011. The documents were laid on the Table on 30th June, 2010 and pursuant to the provisions of Standing Order No.152, the Committee on Energy, Communication and Information considered and scrutinized the Printed Estimates of the Ministry of Energy. In considering the Estimates, the Committee held meetings with the two Assistant Ministers for Energy, who were accompanied by the Permanent Secretary and various parastatal heads. All these were in attendance. The Committee also met with the staff of the Budget Office of the National Assembly. While scrutinizing the Estimates, the Committee considered the following documents, namely; the Vision 2030 Medium-Term Plan, the Ministry’s Strategic Plan, the Printed Estimates for the Financial Year 2010/2011 for Vote 30 and the guidelines for the preparation of the 2010/2011 to 2012/2013 Medium-Term Expenditure Framework (MTEF) budget ceilings. We also considered the Budget Speech for 2010/2011, the Budget Outlook Paper for 2010/2011, the Budget Strategy Paper for 2010/2011 and the Budget Policy Statement. The Ministry of Energy is mandated to develop and implement the energy policy, regulate the energy sector players and ensure secure efficient utilization and conservation of energy. This mandate is in line with the Vision 2030 which has identified energy as one of the key enablers of the Vision 2030’s three pillars, namely; economic, social and political governance. The Ministry largely plays a facilitative role in energy supply. This involves taking leadership in the development of policy as well the legal and regulatory framework for the sector. It also plays an oversight role over the service providers, including State corporations and private power producers. Commercial energy in Kenya is dominated by petroleum and electricity, which are the prime movers of the modern sector economy. While wood fuel provides energy needs of the traditional sector, this is equivalent to about 68 per cent of the energy utilized in this country. Petroleum contributes 22 per cent and the rest contributes only one per cent. Mr. Deputy Speaker, Sir, Kenya’s total electricity supply capacity as at December, 2009, was estimated at 1,360 Megawatts against the peak demand of 1,100 Megawatts. This is equivalent to 33 per cent which comes from thermal oil which depends on crude oil prices. This indicates that the cost of energy in the country is erratic and subject to global forces that are completely uncontrolled by our Ministry. In order to achieve its mandate, the Ministry needs to urgently address some of the challenges facing the energy sector. This includes inadequate power supply capacity, over-reliance on hydro power, weak transmission and distribution of power tariffs, high and escalating prices of fossil fuels, limited investor interest in oil and geo-thermal exploration, obsolete oil refinery, inadequate port facilities, stressed oil pipeline and dependence on donor funding. The Committee is in agreement with the proposal that was tabled in the House by the Minister for Energy in most Sub-Votes, with the exception of three Heads. For example, under Head 435 – National Grid System, the proposed net expenditure is Kshs8 billion, which is in addition to the Kshs7 billion that the Ministry expects to raise as Appropriation-In-Aid (A-in-A) from our development partners. The Committee notes that the amount under this Head will be spent as follows:- Kshs200 million will be spent on research and feasibility study for nuclear electricity development and Kshs300 million for the acquisition of 100 hectares of land in Takaungu, Mombasa, for the development of coal fired power park. Another Kshs110 million will be spent on research, planning and design of the national grid system and Kshs3.2 billion on the Kenya Power and Lighting Company (KPLC) for capacity charges and tax refunds for emergency power supply contracts to reduce the cost of power to consumers, funded by the Government of Kenya. One hundred and fifteen million shillings is for the Kenya Power and Lighting Company (KPLC) to spend on settlement of outstanding obligations arising from the expansion of the Marsabit and Habaswein isolated power stations. A sum of Kshs2.24 billion is for expansion and strengthening of power distribution systems – that is the Energy Sector Recovery programme funded by loans from development partners, and specifically the International Development Association (IDA). Mr. Deputy Speaker, Sir, Kshs650 million is allocated to KenGen for development of 14 Megawatts Ngong Wind Farm, funded by a loan from Spain with KenGen contributing Kshs50 million. A further Kshs1 billion is allocated to KenGen for development of Olkaria I and Olkaria IV under the Energy Sector Recovery programme funded by a loan from IDA. A sum of Kshs7.829 billion has been allocated to Kenya Electricity Transmission Company (KETRACO) for the transmission of the national grid system funded by the Government of Kenya and development partners as follows: Government of Kenya, Kshs3.696 million; China Exim Bank, Kshs1.5 million; Belgium, Kshs1.13 million; ADB, Kshs500 million; EIB Kshs500 million; and AFD, Kshs500 million. Mr. Deputy Speaker, Sir, the Committee is not in agreement, and we propose that the Ministry should stop taking loans on behalf of corporations which are not strictly state corporations. KenGen and the KPLC are profitable organisations which can raise finances, including loans, on their own. This is against the Government’s policy of reducing transfers to parastatals and, therefore, the loans to KPLC and KenGen, if not acquired, should be suspended. We further recommend that, starting the next financial year, the Government should cease borrowing on behalf of KPLC until the issue of whether KPLC is a parastatal or a private company is settled. Mr. Deputy Speaker, Sir, the proposed net expenditure under Head 436, Geothermal Resources Exploration, is Kshs6 billion. This is in addition to Kshs5.5 billion that the Ministry expects to raise as Appropriations-In-Aid (A-I-A) from international sources – Exim Bank of China. The Geothermal Development Company (GDC) had requested Kshs15 billion, which they did not get. The Committee notes that Kshs11.5 billion of this money will be spent by the GDC on drilling of more geothermal development wells for steam production and purchase of drill rigs. So, what GDC is doing is commendable. This should be encouraged and, if need be, the GDC should be given the amount of money they had requested. We, therefore, recommend that in the next financial year, the Ministry should increase the funding of the GDC. Mr. Deputy Speaker, Sir, the proposed net expenditure under Head 444, Rural Electrification Programme, which I am sure that all hon. Members would want to listen, is Kshs2.69 billion. In addition, the Ministry intends to raise another Kshs2.74 billion as A-In-A. The Committee is greatly concerned by the gross under-funding of the Rural Electrification Programme (REP), and more so by the decrease of the gross allocation from Kshs7.9 billion in the 2009/2010 financial year to Kshs5.43 billion in the 2010/2011 financial year. The Committee further notes with concern that the budget for the REP is projected to further decrease in the succeeding financial years until 2012, when it will go to as low as Kshs3.13 billion. I know for sure that REP expects to complete all of the rural electrification installation rollouts by that time, but that is not to say that their budget should be reduced. It should be cut off when they complete all the network rollouts. Mr. Deputy Speaker, Sir, the Committee recommends that the REP be funded appropriately to complete these projects in good time. We know that the REP is right now doing mainly secondary schools, public places, beaches, and so on, but not primary schools. We believe that electrification of primary schools should also be undertaken in the succeeding years, and not just wait for the year 2012. With those few remarks, I beg to support."
}