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Updates
01.03.2005
25.06.2005
25.06.2005
Jobs clash paralyses Sondu
power project
The Standard
Saturday June 25, 2005
By Alphayo Otieno
A week after Japan
expressed interest in funding another power plant at Sondu-Miriu,
a fresh jobs controversy has paralysed work at the multi-billion
power project.
Hopes that the
project at the foot of Nyabondo Plateau would light up the
neighbourhood have been replaced by uncertainty.
For the past four
days, operations at the site have been grounded following a sharp
disagreement between the contractors and the locals, who argue
that some foreigners have been favoured for jobs they could
handle.
Bloody
demonstrations have now forced the project implementers to close
shop temporarily.
Emotions ran high
at a crisis meeting convened by Nyando District Commissioner John
Egesa to iron out the differences.
A councillor,
Simeon Akatch, claimed that the contractor had unfairly denied the
locals jobs.
The remarks caused
a sharp disagreement between the civic leader and the DC, who
barred journalists from recording briefings by former Nyakach MP
Ondiek Chillo.
Akatch blamed
H-Young, a contractor, and the Kenya Electricity Generating
Company (KenGen) community liaison officer, Mr Erick Oluoch.
"I was
accosted by some workers who claimed they had been denied jobs and
when I asked Oluoch about it, he said workers who had been ferried
to the site had only come to assess work, materials needed and
prepare a bill of quantities before returning to Nairobi,"
said Akatch.
But Mr Justus
Waimiri, a public relations officer for KenGen, said those who had
been employed at the site were experts, and that the locals had no
reason to complain.
"The locals
were mainly needed for the civil works which were not specialised
and now there is no room for them," said Waimiri by phone.
The project has
been plagued by problems since conceptualisation in 1985 to
inception in 1999.
When it came back
on course this year, Japan, its main financier, was optimistic
that it would be ready by 2007 as scheduled.
Environmentalists
and lobby groups, who argued that the project posed serious health
and environmental risks to the residents, forced work to be
suspended in 2002 at the end of the first phase.
Things got worse
when the Japanese government tied the project’s financing to the
World Bank and IMF conditions, asking Kenya to rein in rampant
corruption.
Shortly after the
Japanese move, President Kibaki travelled to Japan to renegotiate
funding for Sondu-Miriu and other projects.
He returned with
good news — that the project, which was fast becoming a white
elephant, was headed for completion.
Last week, reports
that another power project was in the horizon elicited excitement
in the region.
Executives from the
Japan Bank for International Co-operation (JBIC) toured the site
of another power plant and expressed optimism that Japan would
release funds for it.
"We are
pleased with the administration of funds for the first and second
phases of the first power plant project and we are considering
funding another one here," said Mr Yoshiko Morita, JBIC chief
executive.
Only two years ago,
a senior JBIC official, Mr Katsumori Sawai said Japan had
developed cold feet because of Kenya’s poor record in serving
international debts.
The worst came when
the Japanese Ambassador to Kenya, Mr Morshisa Aooki, threatened to
cancel involvement in the project altogether.
Like the first
power plant, the second power plant is likely to be handled by a
Japanese contractor. Morita said a loan for the second power plant
would be given on condition that only Japanese companies are
awarded the major civil tenders.
He said the
Japanese had drafted soft terms for the loan and it would only be
fair for their companies to benefit.
In the first power
plant, Konoike, the lead contractor, is undertaking civil works
jointly with Viedekke Heavy Construction of Norway and Murray and
Robberts Contractors International of South Africa.
Other companies are
involved in the hydro-mechanical works, supply of generating
equipment and construction of the transmission line.
KenGen awarded the
design and supervision contract to Nippon Koei Company of Japan
and the first construction contract to Konoike consortium.
The first and the
second power plants are expected to add some 60 and 20 Megawatts
to the national grid, operating at an annual energy output of 331
GWh.
A technical
committee comprising JBIC and KenGen officials at the project last
week said phase two of the first power plant was on course.
Phase two of the
first power plant, which President Kibaki commissioned in March,
was expected to cost Sh9.4 billion but the cost increased by Sh2
billion when the project stalled. Kengen is expected to provide
the Sh2 billion and Japan Sh9.4 billion.
The resumption of
work on the phase two of the project was delayed after the
Japanese contractors failed to agree with KenGen on who would
handle the difference after costs went up.
Sources indicated
that the demands by Konoike Construction JV of Japan that KenGen
pays a Sh10 billion penalty for breach of contract during the
project’s phase one was to blame for the delay of phase two.
The contractors are
said to have been demanding that civil works, hydro-mechanical,
generating equipment and transmission line contracts be varied by
between 70 to 80 per cent given the escalated cost of equipment
over the three year period that worked stalled.
With construction
work back on track, the second phase is expected to end by 2007.
It is estimated that Sh1.8 billion out of the 9.4 billion will
cater for engineering services and other contingencies.
KenGen deputy
Managing Director Joe Ng’ang’a says the figures have been
renegotiated to cater for the time lapse and economic parameters
that have changed.
Ng’ang’a says
it is likely that the project could be completed on time and
within the budget.
01.03.2005
Japan threatens to withhold aid
over graft claims
By JOHN OCHIENG
01. March 2005
President Kibaki is conducted
on a tour of Sondu Miriu Hydro-Electric Power Project by
KenGen managing director Eddy Njoroge shortly before he
launched it yesterday.
Photo by PPS |
Japan
yesterday added its voice to the raging debate on corruption
in Kenya when its envoy told President Kibaki: "Fight
corruption or we'll not fund projects in Kenya."
The Japanese
ambassador, Satoru Miyamura, spoke at Sondu Miriu hydropower
project where the Head of State was officially launching the
second phase of the multi-billion-shilling project.
The envoy told the
President, to his face, that unless he showed satisfactory
commitment to fight graft in his Government, Japan would
stop funding projects in the country. |
The envoy expressed Japan's
displeasure with the Kenyan Government over alleged mass
corruption among top Government officials and challenged the
President to take decisive action to restore donor confidence.
Said he: "Japan is willing to
fund more development projects here, but the allegations of
corruption are holding us back. We will consider giving more
support only if you put proper policies in place to weed out this
vice from your Government."
But when he rose to speak, the
President did not respond to the envoy's remarks and instead
thanked the Japanese Government for resuming funding for the
project's second phase, which stalled four years ago.
He said the project was an
important component of the Government's strategy to reduce the
growing energy demand in the country that has been increasing at
the rate of 5 per cent per annum.
"This project is key to the
success of my Government's economic recovery programmes. Most
crucial is the electrical energy, which is essential for the
functioning of the industrial sector," he noted.
It stalled when Japan withheld
funding and gave tough conditions before resuming.
Also present during the
groundbreaking ceremony were First Lady Lucy Kibaki and several
Cabinet ministers.
Work should have restarted earlier,
but was delayed due to evaluation of costs, which increased during
the period it stalled. It will now cost an extra Sh2 billion,
which is to be met by the Kenyan Government through Kenya
Electricity Generating Company (KenGen).
The four contracts - for civil
works, hydro mechanical works, generating equipment and
transmission lines - and substations, signed between KenGen and
various contractors, are worth Sh7.6 billion. In total, the
project's second phase will cost Sh9.4 billion. Approximately
Sh1.8 billion will cater for engineering services from phase one
and other contingencies. The figures were renegotiated between the
parties to cater for lapse of time and changed economic parameters.
The project has been plagued by
problems ranging from environmental, social to funding since its
inception five years ago. As a result, it stalled at the end of
the Sh14billion first phase in 2002 after the Japanese Government
- the project's main donor withheld Sh7 billion funding for the
second and final phase until certain conditions are met. (PPS)
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