Vision 2030: ICT and Other Sectors Converged (Day 3)
Dr. Ndemo, if you may some commentary under your submission.....also from my iPhone so please pardon any errors.
Sent from my iPhone
On Dec 30, 2011, at 6:12, bitange@jambo.co.ke wrote:
From the Blackberry (forgive unintended mistakes).
Grace, Allow me to wish everybody a prosperous 2012. I join myself to this wish and extend it beyond the wish that in 2012 we would rise up and DO the things we have been discussing and planning in this forum.
My year did not end well having lost a dear friend and mentor, Prof. Donald Woods. You have my condolences and let Prof. Woods rest in the assurance that those of us they have handed the baton to would build on their works and do greater works.
I have followed the debate but I must say here that I was rather disappointed. Me too but at least there is discussion and hope that we can move in the cause towards DOING.
Mugo is one of the most accomplished Kenyan having risen to the pinnacle of both Private and Public sectors in Kenya. I got the feeling that we treated him with kid gloves. I did not see any question with respect to our expectation of the public in achieving the vision. Let me elaborate what has happened in developed countries' guiding policies.
Adam Smith thought that politics and the economics are two different activities. That economic activity happens whether you like it or not. That is how he came up with his "invincible hand" (you cannot quite see what guides business in a capitalist society) these thoughts guided especially the Western world between 1776 and 1920. There were many variants of this thinking. That is how Marx thought it cannot survive. And indeed it formented bad things such as slavery and extreme poverty.
The separation of economics and politics ended with British economist, Kynes introduction of new thinking leaning more to social democracy arguing that the role of government was to manage the economy. That is how government intervention in business activity was introduced. Mainly the role of government here was to make laws of market economics and let the citizen do their thing. This thinking thrived for 40 years and led to great success when new thinking close to Adam Smith's emerged.
Milton Friedman assisted by politicians Thatcher and Reagan. Instead of treating economics as a branch of politics they went the opposite and treated politics as a branch of economics. Deregulation set in and massive unemployment crept in. Enterprises made money and greed of couse set in.
Unfortunately this is where I would have to stop you.....Greed has been around for the longest time, even before Adam Smith and has been responsible for the failure of all the economic theories you have outlined above. Am not saying there is anything wrong with greed but when greed is not "regulated" it makes a mockery of the best systems ever invented, please help me in studying global and economic history and before long it would clear.
That is how the whole thing came crashing in 2009 and the rise of civil society's demand to occupy Wall Street. Same way it crushed before, again and again so as a member of the human race, my advise is, let's watch this guy called greed and "contain" it. Otherwise the European crisis would soon get out of hand which would trigger situations in Asia. As a matter of fact in Paul Krugman's last piece in the NY Times, he firmly argues that China would have no choice than to break soon and if you pay close attention to the submission, you would see greed all over it....
These two competing ideologies have have shaped Western Politics. Ideologies yes but our human endeavors can undo all ideological underpinning so personally I have moved to the middle with Obama. I think our world would only be sustainable in the 21st century if we avoid "extremism" and find moderation as the key so for example we need to find moderation between "ideologies" and "pragmatism".
We have for many years blindly followed the West and assumed our people understand this. My good old friend Prof. George Ayittey would buy you a beer for making this point which am not ashamed to say he spent his entire life making. George argues and I have spent time to read greatly on this and am convinced that he is saying something that need serious attention, before the colonial master Africa had her own governance and political system that was based on consultation and consensus etc. He then argues that colonialism did a lot of damage but we cannot continue to blame colonialism and then insist on their imported system which in his own words "our African elites do not understand". In Africa Unchained, he confronts Prof. Ali Mazuri's externalist approach and homes in on our need to be internalist. Am a big fan of Ali as I am of George so my verdict is that both are right in presenting the extreme views but WE have to find the middle ground (moderation) to chat our cause for Africa's re-emergence. Let me be quick to add that in some cases we are doing that but need to be more forthright and speedy in implementation because trust me, great ideas are not enough.
Capitalism is not bad at all. It is the most adaptive ideology but yet the most misunderstood. Am still learning and experiencing it and am open to more of such, actually am a student of knowing my experience but that does not mean I don't read.....moderation as always is the key.
Take The case of China and Russia. Both are under the assumption that they are opening up their economies to free market economy. China has been successful with a regulated capitalism whereas Russia's approach only led to creation of oligarchs and millions of the poor. You know am very careful when I speak about these two establishments and I won't for a second pretend I know anything about them because I don't, am still in the process of spending time there, reading and trying to understand what is going on but there is one thing I would stand up to, "only fools doubt results" - so long as China is poised to over take the US in the 21st century, I have no problem reducing myself to learning what they are DOING right. The US's number complaint is China in every form, currency manipulation, you name it. Am not saying it is not true but to my point one needs to strike a balance even between complaining and doing. If China is a "fraud", time would take care of it but for now we in Africa need to ask ourselves, how can we do and do better than them.....:-)
Clearly in Kenya we need to define what we want. What we expect of the government. What we expect of the people. The private sector is not capable of exploiting the opportunities we have.
You have laid out the foundation of a united Africa but am not sure I entirely agree with your wording of the last sentence. For what it is worth, I would expand. Africa has had steady GDP growth of 5% average over the last decade and the mobile magic also happened over the same period and we have empirical data to support the correlation between GDP growth and fix line, mobile, internet and broadband penetration so something has to give. However we don't yet have basis for coxiality, also if you take the UNDP HDI over the same period, you see a decline which tells me that something is wrong. Now to my point that the growth we have experienced has being purely private sector lead so I disagree with you to extend that you "entirely" dismiss the private sector's ingenuity but I know that not what you meant. I agreed with you that there is more room for improvement. Haven said that let me tell you the Eric Osiakwan foundation of the problem and I think we have debated this before but if members would pardon me. Empirical data tells us that between 35 to 65% of African economies are OWNed by non-Africans, this means that there is massive capital flight so the 5% growth that we are seeing is not reinvested in Africa and you know better than me the economics of capital circulation and for those who do not, George Soros did the best rendition of this in his book "Soros on Globalization". Anyway so my submission is we need to craft a strategic approach towards owning Africa ourselves, otherwise trust me we would be going in circles for much longer, if you don't believe me ask God.
If they were they could have invested in Energy. Energy is a problem because government is "standing" in the way of private sector instead of assuming a posture of how do we (all stakeholders) work together to generate a win-win situation. The mobile magic is a perfect example, it could not have being done by the private sector alone, all had to collaborate so again it is all about striking a balance even between the stakeholders. Just ten years ago, there were more landlines in Manhattan than all of Africa but now Africa has more cellphones than the whole of the US and we lead the world -- the economist cannot help but change it's headline from hopeless to hopeful: folks, something has happened in the last decade wether you like it or not. Mo Ibrahim has become a billionaire from that, I only wish he was living fulltime and reinvesting all that money in Africa. Mark Shuttleworth, MTN etc are all examples whic begs the question why is it that we make billionaires and millionaires on the continent only for them to relocate? These are the issues I expect the African Union to be discussing (not debating...:-) to come out with a plan to change that in from 2012....
If they were they could have put their money in the fledgling ICT sector. I may be wrong but if you pay attention to the investments in various sectors over the decade, the private sector has done much more for the ict sector than government (this is not to pitch them against each other) and the Ict sector has had more impact on lives than other sectors. Let's take the mining sector, am afraid that it has only made the rich richer from the natural resources in the poor man's backyard and in some cases destroyed farmlands that use to sustain peasant farmers. The mobile magic to the contrary is liberating, empowering and democratizing - my mother calls me and tells me, "Eric I hear Ecobank is selling shares, am going to buy some so why don't you also", before she use to rely on me telling her what's going down - something has changed.
Back to Mugo. Yes, back to basics...
Given the underlying ideological theories and the fact that our peoiple are unaware, They are becoming aware, i like to recognize little efforts or success as a basis not to be complacent but to do more and better.
what do we expect from the people of Kenya in achieving Vision 2030? The answer is "let's DO - get everyone doing something". Africa is soo good on paper sometimes I wish we could just be in the paper. In 2012, let's start focusing on implementing vision 2030 even if it is not the best. We can be refining it as we implement because we have being planning this for way to long and if we are not careful 2030 would arrive with us still discussing and planning it.
Ndemo.
Eric here
Sent from my BlackBerry®
-----Original Message----- From: Grace Githaiga <ggithaiga@hotmail.com> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Wed, 21 Dec 2011 20:33:52 To: <bitange@jambo.co.ke> Cc: <kictanet@lists.kictanet.or.ke> Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Eric M.K Osiakwan Director Internet Research www.internetresearch.com.gh 42 Ring Road Central Accra-North, Accra +233244386792
Eric, I think to a large extent we are saying the same thing. My question is simple. How much Government do Africans want in their entrepreneurial activities? My arguments tends to show that in general if there is less government, policies tend to favour enterprise at the expense of the poor majority. This is when the government takes politics as a branch of economics as previously theorized by Adam Smith and Milton. Friedman. Although greed has been with us for ages, within such an environment, greed is therefore sanctioned by government. The extreme end of capitalism is only found in Somalia where the economic activities are independent of government. Sometimes politics in Somalia is a complete branch of economic activity. I am surprised that you are defensive about Africa's private sector. You do not need to do much in Africa to grow at 5%. The inefficiencies in Africa are mind boggling. I have extensively written about this in this forum. Africa can actually grow at a rate of 20% on an annual basis. We have not even reduced post production inefficiencies to stem food insecurity. Much of the enterprise in Africa today was due to privatization of state enterprises including the communication sector. Innovations like Makmende in Kenya were not seen as opportunity to invest in. You can even ask Liko in this forum. We have not even taken seriously innovations coming from our youth. If you apply Schumpeter's creative destruction theory, you will find that there are only a handful of Africans who fit the bill even though we have had opportunities to destroy existing technologies. Makmende would have dealt face book a big blow. I attend most of presentations by youth at I-hub and I-Lab. The angel investors you see in these presentations are not Africans. By any statistics, if all venture capitalist are foreign then when such ideas break big, we shall simply be onlookers. Who should be taking the risk? Should government be in business only to privatize when risk is minimized? Here is our real problem. Africa celebrates with drum beats with the hatching of one chick while the west would only celebrate with violins when all the chicks have been hatched. The potential growth rate in Africa has not reached where we can begin to celebrate with drum beats. We must keep on the pressure. The private sector must wake up. Your celebration of our academics in the diaspora again is too early. Most of African academics abroad are suspect. I do not know whether they are genuine or simply saying what is politically correct. I think they are guilty for not coming back to be foot sodiers of development. It is easier to cheer or jeer from the sidelines. They must make sacrifices and come home to share their experiences. Let us see them take the leadership and show us the way. On leadership and pragmatism. There is nothing out of playing in the middle and call it pragmatism. You either have the Government in business activity or not at all. Obama is a liberal and a good one after nationalizing the collapsing enterprises of America. If it was not his intervention there will not be GM or Citi Bank. This is not politics of the middle, this is reminding the world that economics is a branch of politics. This what Roosevelt did to safe capitalism. Pragmatism is when you sit in the fence. Regards. Ndemo. Sent from my BlackBerry® -----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
My last word in 2011 before we usher in 2012 is to agree that we have not done enough to unlock the potential in our youth. Mugo, if there is one thing vision 2030 should attempt to implement in partnership with other like minded agencies and good Kenyans as 2012 starts is a mega youth innovation project that cuts across all counties - lets unlock their creativity and potential esp in the ICT industry. But approach youth initiative in a wholistic and integrative manner to ensure issues of core values and community service are addressed to avoid a generation that thrives on greed and primitive accumulation! To the Presidential candidates on this list and those following discussions on this list through proxies - two pieces of advice. 1. Invest in a mega youth Initiative before August 2012 (when the elections will be held) 2. Chose a woman running mate and for the only woman Presidential candidate, chose a male running mate - we must now operate 50/50 going into the future. Happy new year to all! Edith ----- From: kictanet-bounces+eadera=idrc.or.ke@lists.kictanet.or.ke [kictanet-bounces+eadera=idrc.or.ke@lists.kictanet.or.ke] On Behalf Of bitange@jambo.co.ke [bitange@jambo.co.ke] Sent: 31 December 2011 07:38 To: Edith Adera Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Eric, I think to a large extent we are saying the same thing. My question is simple. How much Government do Africans want in their entrepreneurial activities? My arguments tends to show that in general if there is less government, policies tend to favour enterprise at the expense of the poor majority. This is when the government takes politics as a branch of economics as previously theorized by Adam Smith and Milton. Friedman. Although greed has been with us for ages, within such an environment, greed is therefore sanctioned by government. The extreme end of capitalism is only found in Somalia where the economic activities are independent of government. Sometimes politics in Somalia is a complete branch of economic activity. I am surprised that you are defensive about Africa's private sector. You do not need to do much in Africa to grow at 5%. The inefficiencies in Africa are mind boggling. I have extensively written about this in this forum. Africa can actually grow at a rate of 20% on an annual basis. We have not even reduced post production inefficiencies to stem food insecurity. Much of the enterprise in Africa today was due to privatization of state enterprises including the communication sector. Innovations like Makmende in Kenya were not seen as opportunity to invest in. You can even ask Liko in this forum. We have not even taken seriously innovations coming from our youth. If you apply Schumpeter's creative destruction theory, you will find that there are only a handful of Africans who fit the bill even though we have had opportunities to destroy existing technologies. Makmende would have dealt face book a big blow. I attend most of presentations by youth at I-hub and I-Lab. The angel investors you see in these presentations are not Africans. By any statistics, if all venture capitalist are foreign then when such ideas break big, we shall simply be onlookers. Who should be taking the risk? Should government be in business only to privatize when risk is minimized? Here is our real problem. Africa celebrates with drum beats with the hatching of one chick while the west would only celebrate with violins when all the chicks have been hatched. The potential growth rate in Africa has not reached where we can begin to celebrate with drum beats. We must keep on the pressure. The private sector must wake up. Your celebration of our academics in the diaspora again is too early. Most of African academics abroad are suspect. I do not know whether they are genuine or simply saying what is politically correct. I think they are guilty for not coming back to be foot sodiers of development. It is easier to cheer or jeer from the sidelines. They must make sacrifices and come home to share their experiences. Let us see them take the leadership and show us the way. On leadership and pragmatism. There is nothing out of playing in the middle and call it pragmatism. You either have the Government in business activity or not at all. Obama is a liberal and a good one after nationalizing the collapsing enterprises of America. If it was not his intervention there will not be GM or Citi Bank. This is not politics of the middle, this is reminding the world that economics is a branch of politics. This what Roosevelt did to safe capitalism. Pragmatism is when you sit in the fence. Regards. Ndemo. Sent from my BlackBerry® -----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/eadera%40idrc.or.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Edith Isn't choosing a running mate because she is female is discriminatory ? And do you know of any "youth" program that has "worked" :) On 12/31/11, Edith Adera <eadera@idrc.or.ke> wrote:
My last word in 2011 before we usher in 2012 is to agree that we have not done enough to unlock the potential in our youth.
Mugo, if there is one thing vision 2030 should attempt to implement in partnership with other like minded agencies and good Kenyans as 2012 starts is a mega youth innovation project that cuts across all counties - lets unlock their creativity and potential esp in the ICT industry. But approach youth initiative in a wholistic and integrative manner to ensure issues of core values and community service are addressed to avoid a generation that thrives on greed and primitive accumulation!
To the Presidential candidates on this list and those following discussions on this list through proxies - two pieces of advice.
1. Invest in a mega youth Initiative before August 2012 (when the elections will be held) 2. Chose a woman running mate and for the only woman Presidential candidate, chose a male running mate - we must now operate 50/50 going into the future.
Happy new year to all!
Edith
----- From: kictanet-bounces+eadera=idrc.or.ke@lists.kictanet.or.ke [kictanet-bounces+eadera=idrc.or.ke@lists.kictanet.or.ke] On Behalf Of bitange@jambo.co.ke [bitange@jambo.co.ke] Sent: 31 December 2011 07:38 To: Edith Adera Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Eric, I think to a large extent we are saying the same thing. My question is simple. How much Government do Africans want in their entrepreneurial activities?
My arguments tends to show that in general if there is less government, policies tend to favour enterprise at the expense of the poor majority. This is when the government takes politics as a branch of economics as previously theorized by Adam Smith and Milton. Friedman. Although greed has been with us for ages, within such an environment, greed is therefore sanctioned by government.
The extreme end of capitalism is only found in Somalia where the economic activities are independent of government. Sometimes politics in Somalia is a complete branch of economic activity.
I am surprised that you are defensive about Africa's private sector. You do not need to do much in Africa to grow at 5%. The inefficiencies in Africa are mind boggling. I have extensively written about this in this forum. Africa can actually grow at a rate of 20% on an annual basis. We have not even reduced post production inefficiencies to stem food insecurity.
Much of the enterprise in Africa today was due to privatization of state enterprises including the communication sector. Innovations like Makmende in Kenya were not seen as opportunity to invest in. You can even ask Liko in this forum. We have not even taken seriously innovations coming from our youth. If you apply Schumpeter's creative destruction theory, you will find that there are only a handful of Africans who fit the bill even though we have had opportunities to destroy existing technologies. Makmende would have dealt face book a big blow.
I attend most of presentations by youth at I-hub and I-Lab. The angel investors you see in these presentations are not Africans. By any statistics, if all venture capitalist are foreign then when such ideas break big, we shall simply be onlookers. Who should be taking the risk? Should government be in business only to privatize when risk is minimized?
Here is our real problem. Africa celebrates with drum beats with the hatching of one chick while the west would only celebrate with violins when all the chicks have been hatched. The potential growth rate in Africa has not reached where we can begin to celebrate with drum beats. We must keep on the pressure. The private sector must wake up.
Your celebration of our academics in the diaspora again is too early. Most of African academics abroad are suspect. I do not know whether they are genuine or simply saying what is politically correct. I think they are guilty for not coming back to be foot sodiers of development. It is easier to cheer or jeer from the sidelines. They must make sacrifices and come home to share their experiences. Let us see them take the leadership and show us the way.
On leadership and pragmatism. There is nothing out of playing in the middle and call it pragmatism. You either have the Government in business activity or not at all. Obama is a liberal and a good one after nationalizing the collapsing enterprises of America. If it was not his intervention there will not be GM or Citi Bank. This is not politics of the middle, this is reminding the world that economics is a branch of politics. This what Roosevelt did to safe capitalism. Pragmatism is when you sit in the fence.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
-- Sent from my mobile device
On Sat, Dec 31, 2011 at 7:38 AM, <bitange@jambo.co.ke> wrote:
Eric,
.... I attend most of presentations by youth at I-hub and I-Lab. The angel investors you see in these presentations are not Africans. By any statistics, if all venture capitalist are foreign then when such ideas break big, we shall simply be onlookers. Who should be taking the risk? Should government be in business only to privatize when risk is minimized?
Kenyan / African youth who serve their fellow Africans as well or as hard as they try to impress (pitch to) foreigners are very rare but most valuable breed (Most Valuable Kenyans -- MVK's -- or Most Valuable Africans -- MVA's). Who / where are they? Once heard James Mwangi state, that "our mothers could not afford to open bank accounts" -- their initial (not necessarily current) target group was Kenyans viewed as worthless by foreign banks.
..... Your celebration of our academics in the diaspora again is too early. Most of African academics abroad are suspect. I do not know whether they are genuine or simply saying what is politically correct. I think they are guilty for not coming back to be foot sodiers of development. It is easier to cheer or jeer from the sidelines. They must make sacrifices and come home to share their experiences. Let us see them take the leadership and show us the way.
Well noted. Nothing good is developed by pure academics but through practicals (practicing integrity and excellence) on the ground / in the field where it is needed most. It is ONLY Kenyans / Africans raising their children here, to value and live in Kenya / Africa that can be PRIMARILY (not exclusively) counted on to continue the good work that has began on the ground. Have a Blessed 2012...
Sent from my iPhone On Dec 31, 2011, at 4:38, bitange@jambo.co.ke wrote:
Eric, I think to a large extent we are saying the same thing. .......In which case this would be my last commentary (facts and opinions) so that we won't necessarily prolong this discussion in 2012 because it is the year of ACTION (less talk, more walk). Am personally committed to the pattern of talking less on this list except for major interventions like this, this is not to say other interventions are not relevant....
My question is simple. How much Government do Africans want in their entrepreneurial activities? Answer: less and less government as the markets mature and the context demands but let me hasten to add that markets are not perfect and would never be so we would always need regulation. In this assertion, I lean more towards Soros and Karl than Adam and Milton.
My arguments tends to show that in general if there is less government, policies tend to favour enterprise at the expense of the poor majority.
Agreed but my argument represents the other side of the coin (remember every coin has two sides....:-) which is that more government turn to craft policies that make a demi-god of government which is evidenced also by poverty and I would give you the African example soon, just stay with me for a minute....so again moderation is the key, we need a balance between government and private as well as other equally important stakeholders.
This is when the government takes politics as a branch of economics as previously theorized by Adam Smith and Milton. Friedman. Am never arguing that it is wrong but rather calling for none-extremism
Although greed has been with us for ages, within such an environment, greed is therefore sanctioned by government. Yes but don't forget that greed is also an animal in government and now to my example. The richest people in Africa are politicians which begs the question, where did they get their money from? On the contrary the richest people in the advanced economies are private sector entrepreneurs who create business, employ people, pay taxes etc. Forbes recently named Aliko Dangote as the richest African with 10.2billion but you and I known thats a joke, right? Because Gaddafi had way more loot than that and only if the Swiss bankers would be honest which I know they won't, you would realize Forbes was only focusing on private sector wealth. Am sorry to be soo blunt but for the sake of Africa let's speak plainly.....
The extreme end of capitalism is only found in Somalia where the economic activities are independent of government. Sometimes politics in Somalia is a complete branch of economic activity. Yes and i acknowledge that it is working but let's see if it stands the test of time.
I am surprised that you are defensive about Africa's private sector.
Am an embodiment of that estate so would defend it not just for defending sake but on the basis of facts and you know I also pointed out the flaws and said we need to do much more.
You do not need to do much in Africa to grow at 5%. At the least I like to recognize little efforts even if they are insignificant, otherwise it won't become significant.
The inefficiencies in Africa are mind boggling. Which may suggest that doing things means overcoming these bogglings so not be as easy.
I have extensively written about this in this forum. Africa can actually grow at a rate of 20% on an annual basis. Yes so lets develop a strategic plan for that, these are the elements that I expect to be on the agenda of the African Union.....
We have not even reduced post production inefficiencies to stem food insecurity. Am not an expert in this area but common sense tells me, yes...
Much of the enterprise in Africa today was due to privatization of state enterprises including the communication sector.
The entire mobile magic has nothing to do with incumbent privatization. I actually think that it happened because governments were busy privitising so could not have time to be a "stumbling block", some deliberately though.
Innovations like Makmende in Kenya were not seen as opportunity to invest in. You can even ask Liko in this forum. We have not even taken seriously innovations coming from our youth. .....hmm, you want to open another can of worms, right?
If you apply Schumpeter's creative destruction theory, you will find that there are only a handful of Africans who fit the bill even though we have had opportunities to destroy existing technologies. Makmende would have dealt face book a big blow. No doubt and I think the opportunity has not passed. Mpesa is a written text application on the mobile phone, the spoken word is pretty generic but my the time the moving images set in, we would have a cruchendou and am certain that African would be the playground for that.....
I attend most of presentations by youth at I-hub and I-Lab. The angel investors you see in these presentations are not Africans.
The question is are there any angels in Africa, answer, no but a few who are trying. Next question, why? Because the banks rates are soo lucrative that it is best and safest to lodge the money there than give it to "some youth with a great idea". Ideas don't even have merit and guess who sets the bank rates?
By any statistics, if all venture capitalist are foreign then when such ideas break big, we shall simply be onlookers. That is my biggest nightmare....
Who should be taking the risk? Government and private sector should be spending sleepless night thinking through this and again, these are the things the AU should be discussing.
Should government be in business only to privatize when risk is minimized? That's her track record, unfortunately...
Here is our real problem. Africa celebrates with drum beats with the hatching of one chick while the west would only celebrate with violins when all the chicks have been hatched. The potential growth rate in Africa has not reached where we can begin to celebrate with drum beats. We must keep on the pressure. The private sector must wake up.
Yes but I also think that if we don't celebrate our little effort to urge us on to greater works, we may relent....
Your celebration of our academics in the diaspora again is too early. Most of African academics abroad are suspect. I do not know whether they are genuine or simply saying what is politically correct.
I prefer to give everyone the benefit of the doubt and for at least saying these things I would give them credit for moral courage because there are lots who won't, innother words for at least stepping to the game, I would rather not suspect them....
I think they are guilty for not coming back to be foot sodiers of development. I really beg to differ because we all have different roles from different locations. The success of Asia is largely due to their ability to leverage their dispora.
It is easier to cheer or jeer from the sidelines. They must make sacrifices and come home to share their experiences. Let us see them take the leadership and show us the way. I worry that your submission above dismisses structural form entirely. For any country to advance there is a role for academics and intellectualism in the same manner that there is a role for the arts and sciences so asking for academics to be private sector seems not okay by me....
On leadership and pragmatism. There is nothing out of playing in the middle and call it pragmatism. You either have the Government in business activity or not at all.
Well, this is where we part ways....
Obama is a liberal and a good one after nationalizing the collapsing enterprises of America. If it was not his intervention there will not be GM or Citi Bank. Freddie Mae and Freddie Mark, Lehman Brothers etc were allowed to perish, why? Because there needs to be a balance between what you can nationalist and what you can't....
This is not politics of the middle, this is reminding the world that economics is a branch of politics. This what Roosevelt did to safe capitalism. Pragmatism is when you sit in the fence. Am not necessarily in agreement but I can live with it so see you my friend in 2012 for more action.....
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come. When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction". We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care. Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market. On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing. Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France. I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda. Regards. Ndemo. Sent from my BlackBerry® -----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale. In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself. Regards, Solomon On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market.
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France.
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Solomon, A very quick response to CORRECT you. Please read Dr. Ndemo's comment on Mugo's moderation and listers' engagement below: ....." Mugo is one of the most accomplished Kenyan having risen to the pinnacle of both Private and Public sectors in Kenya. I got the feeling that we treated him with kid gloves. I did not see any question with respect to our expectation of the public in achieving the vision".... With all due respect, you either read too fast or completely misunderstood the English language. Simply, Dr. Ndemo is challenging the listers like you to up your game in engaging Mugo and Vision 2030 - Not the other way round. Pls. Your perspective on Energy and Vision 2030 is right on point. Let up it! Emmanuel Nzai -----Original Message----- From: Solomon Mbũrũ Kamau [mailto:solo.mburu@gmail.com] Sent: Saturday, December 31, 2011 7:50 AM To: enzai@vision2030.go.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale. In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself. Regards, Solomon On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market.
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France.
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/solo.mburu%40gmail.com
The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
_______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/enzai%40vision2030.go.k... The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Emmanuel, Thank you. As we usher the New Year I worry because we start the stractural implementation of the constitution. Whereas the structure could be different, the players especially at county level will be the same or we may just be "changing hogs at the trough". This is a political and social experiment we must not fail. Like the vision 2030, the new dispensation must be owned by all of us. We have a tendency to think somebody will do it for us. No. The vision and the country is ours. If you have not read either the vision or the constitution, ask. There is no stupid question. We should have asked Mugo such questions as: who owns the vision? What does it seek to achieve? How does it relate to the constitution? etc. I specifically brought the issue of ideology because the county officials will be a huge problem to local development. Any time we lay fibre at local authority, we are charged different levies and demands for bribes goes up as you step up coverage. Indeed I had to put Wajir County Clerk in Jail until the contractor finished laying cable through the towm. They are even beggining to levy tax on base stations. Our problems to create universal access to internet will multiply by 47 times. This is because most local leadership has no idea how government relates to enterprise. My aim is to create sufficient capacity to explain existing theories of politics and economics. In the period after indepedence we largely failed and got away with it. This time round we cannot afford to fail. The outcome will be catastrophic. We need each one of us to play a role in shaping our future. Our Ministry in conjuction with e-government will ensure connectivity to all counties by June 2012. We want to roll out all accountability applications by the same deadline. Whatever we do can only be successive if there is strong support from the public. Through Open Data initiatives we shall ensure that spending is monitored by the public. Therefore success depends on your participation by taking time to follow up and ask questions. Government alone cannot ensure transparency. The public must question every step. We must make the elected leaders account for their decisions. Solomon should not sound dejected about KPLC when we have representation. From this forum we can escalate the issue to beyond Parliament. But because we always think somebody will do it, we get into a frustration mode and complain when things go wrong. Hon. Rege who is Parliamentary Chairman of the Energy Committee is on this list. We can summon him as our representative to have a serious discussion on our future energy needs. In this list we have journalists that we can ask to highlight our fears. If we those who are privileged to have such discourse can sound frustrated, what will a hungry Turkana woman say? Kenya is a land of opportunity. It is a beautiful country. Can we all stand up for it in 2012? Ndemo. Sent from my BlackBerry® -----Original Message----- From: "Emmanuel K. Nzai" <enzai@vision2030.go.ke> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Sat, 31 Dec 2011 09:25:10 To: <bitange@jambo.co.ke> Cc: 'KICTAnet ICT Policy Discussions'<kictanet@lists.kictanet.or.ke> Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Solomon, A very quick response to CORRECT you. Please read Dr. Ndemo's comment on Mugo's moderation and listers' engagement below: ....." Mugo is one of the most accomplished Kenyan having risen to the pinnacle of both Private and Public sectors in Kenya. I got the feeling that we treated him with kid gloves. I did not see any question with respect to our expectation of the public in achieving the vision".... With all due respect, you either read too fast or completely misunderstood the English language. Simply, Dr. Ndemo is challenging the listers like you to up your game in engaging Mugo and Vision 2030 - Not the other way round. Pls. Your perspective on Energy and Vision 2030 is right on point. Let up it! Emmanuel Nzai -----Original Message----- From: Solomon Mbũrũ Kamau [mailto:solo.mburu@gmail.com] Sent: Saturday, December 31, 2011 7:50 AM To: enzai@vision2030.go.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale. In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself. Regards, Solomon On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market.
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France.
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
_______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/enzai%40vision2030.go.k... The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Emmanuel, I must have read Dr. Ndemo's comment hastily that I couldn't point out the paragraph you've quoted. Much apologies to Dr. Ndemo on my misunderstanding. As we get into the year 2012, let us look for a way to engage ourselves in making the vision a reality. Good evening. Solomon On 31/12/2011, Emmanuel K. Nzai <enzai@vision2030.go.ke> wrote:
Solomon, A very quick response to CORRECT you. Please read Dr. Ndemo's comment on Mugo's moderation and listers' engagement below:
....." Mugo is one of the most accomplished Kenyan having risen to the pinnacle of both Private and Public sectors in Kenya. I got the feeling that we treated him with kid gloves. I did not see any question with respect to our expectation of the public in achieving the vision"....
With all due respect, you either read too fast or completely misunderstood the English language. Simply, Dr. Ndemo is challenging the listers like you to up your game in engaging Mugo and Vision 2030 - Not the other way round.
Pls. Your perspective on Energy and Vision 2030 is right on point. Let up it!
Emmanuel Nzai
-----Original Message----- From: Solomon Mbũrũ Kamau [mailto:solo.mburu@gmail.com] Sent: Saturday, December 31, 2011 7:50 AM To: enzai@vision2030.go.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market.
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France.
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Solomon, Having moved from Science & Technology (under Ministry of Higher Education, Science and Technology) to Nuclear Electricity Project (under Ministry of Energy) there are some perceptions that the PS of Information & Communication have that needs further interrogating. While working outside Kenya (1998 to 2006) I was privileged to visit many countries that operated nuclear power plants for electricity generation and will share experiences from a few. In France the energy giant is called EDF.see http://france.edf.com/france-45634.html It is like combining Kenya Power (distributors), KETRACO (transmitters), KenGen (generators) and a myriad of others e.g. Nuclear Electricity Project, Geothermal Development Co, Rural Electrification, etc. EDF owns power stations (58 nuclear power plants, coal and gas power generators, hydro power stations). EDF also owns the transmission lines (for both high and low voltages) and EDF is also a great marketer (sells electricity to over 30 million customers in France and over 25 million outside France). Yet the government of France owns the lion share in EDF. What we call here Independent Power Producers are insignificant in France. In fact the regulators, who for example control the nuclear power infrastructure (called the French Nuclear Safety Authority see http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2 selected by the President, 1 by the Prime Minister –the French have a system whereby the losing party produces the prime Minister – one by the equivalent of COTU, one by the professional in the nuclear industry). This is similar to USA where Nuclear Regulatory Commission also has 5 Commissioners, 3 chosen by the party in power and 2 by the losing party. In both France and USA nuclear is therefore a national matter and is not reduced to part politics. In USA by contrast what we call here IPP reign supreme. In nuclear for example some equivalents of our Tana and Arthi River Develoment Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own both hydro and nuclear power plants. Municipalities too own power companies. So too do equivalents of IPPs here. Different entities also own transmission and distribution lines. What is in USA is more of an exception and not the rule. The rules/laws in USA for example would not tolerate a scenario where a serving people’s representative (in Senate or Congress) would be a wanted person for deals done when s/he was a Secretary (of State, Energy, Treasury etc.) and a former MD (President in USA energy firm) would be ‘respectable’ public figures after questions bordering on criminality arise. Most of the world (Russia, China, Japan, South Korea, Iran, Egypt, etc.) the government irrespective of the party in power plays a very visible role in energy generation, transmission, distribution and marketing. In Egypt for example electricity is cheaper for manufacturers (hence fruits grown in Egypt by irrigation using electricity to pump water from the nile to orchards are cheaper in Kenya than our own locally produced fruits with rain fed agriculture!) and heavily subsidized for the population so as to ensure 98% electrification (Kenya we are just blow 20% while in Hungary upto year 1999 every human habitation it was the duty of the government to connect it with electricity that costs less than kshs. 40 per month for the dweller then irrespective of consumption). Hansard has a report with the following in it. The Energy Act 2006 removes monopoly of Kenya Power as distributor. The Committee on Energy, Communications and Information was constituted on June 17th 2009 and its membership is as follows:- 1. The Hon. (Eng.) James Rege, M.P. Chairman 2. The Hon. Maina Kamau, M.P Vice Chairman 3. The Hon. Danson Mwazo Mwakulegwa, M.P 4. The Hon. Mohamed Hussein Ali, M.P 5. The Hon. (Eng.) Nicholas Gumbo, M.P 6. The Hon. Edwin O. Yinda, M.P 7. The Hon. Emilio Kathuri, M.P 8. The Hon. Ekwee Ethuro ,M.P 9. The Hon. (Prof.) Phillip Kaloki, M.P 10. The Hon. Cyprian Omolo, M.P The Committee is mandated to consider:- • Development, production, maintenance and regulation of Energy. • Communication. • Information. • Broadcasting, and • Information Communications Technology (ICT) development. The Committee executes its mandate in accordance with the provisions of Standing Order 198 (3), which is – a) to investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned Ministries and Departments; b) to Study the programme and policy objectives on Ministries and Departments and the effectiveness of the implementation; c) to Study and review all legislation referred to it; d) to study, assess and analyze the relative success of the Ministries and departments as measured by the results obtained as compared with their stated objectives; e) to investigate and enquire into all matters relating to the assigned Ministries and departments as they may deem necessary, and as may be referred to them by the House or a Minister; and f) to make reports and recommendations to the House as often as possible, including recommendation of proposed legislation. Further, Standing Order No. 152 provide that:- (1) Upon being laid before the National Assembly, the Annual Estimates shall stand committed to the respective Departmental Committees according to their mandates. (2) Each Departmental Committee shall consider, discuss and review the Estimates committed to it under this standing order and submit its report thereon to the House within twenty one days after they were first laid before the House. Ministries assigned In executing its oversight mandate the Committee oversees the following Ministries:- i) Ministry of Energy ii) Ministry of Information and Communications. On Wednesday14th April, 2010 during the Afternoon Sitting, the Member of Parliament for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the following Question by Private Notice. a. What is the relationship between Kenya Power and Lighting Company (KPLC) and Rural Electrification Authority (REA)? b. How much money has the Ministry paid to KPLC through REA since its inception to date? c. Could the Minister provide details of the amount paid as dividends to the major shareholders of KPLC since its privatization? In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on Tuesday 16th March, 2010 asked a Question on overcharging of electricity consumers by KPLC. The two questions elicited a lot of interest from Members who sought to know whether KPLC is a parastatal or a private company, its shareholders, whether it receives funding or financial support from the Government, its working relationship with REA, the amount of dividends it had paid to its shareholders over time and other issues surrounding its ownership and management. As a result, on 14th April, 2010, the Speaker directed that the Departmental Committee on Energy, Communication and Information should take up this matter and file a report in the House. KPLC is a public company that was incorporated in 1922 as a private company and was later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the government bought KPLC shares totaling to 32,853,268 which represents 40.4% of the voting shares of the Company. It is responsible for transmission, distribution and retail supply of electrical energy to end users. It purchases power in bulk from KenGen and the IPPs through bilateral contracts or Power Purchase Agreements (PPAs) approved by ERC. KPLC is responsible for ensuring that there is adequate line capacity to maintain supply and quality of electricity across the country. The interconnected network of transmission and distribution lines covers about 41,486 kilometers. It has more than 1,500,000 customers who consumed over 5,432 Gigawatt hours of electricity in the financial year 2008/9. During the year, the maximum daily electricity peak demand recorded was 1,072 MW. The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely liberalized the energy sector in the country which was started in 1997 when KenGen was formed out of KPLC. The Policy Paper among others established a single energy regulator and unbundled KPLC to form KETRACO, REA and GDC. KPLC is the only licensed supplier, distributor and retailer of electrical energy in Kenya KPLC is a single buyer for all the power generated in Kenya and injected into the interconnected grid for sale to the consumers. The trading arrangements between KPLC and each of the generators are governed by a long-term Power Purchase Agreement (PPA) approved by ERC. Such PPAs comprise capacity charge, energy charge, fuel pass through and inflation indexed clauses. The retail tariff structure comprises of a fixed charge, energy charge and capacity charge. On Wednesday 14th April, 2010, while answering a Question by Private Notice by Hon. B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was not clear on whether KPLC is a parastatal or not. At one point he informed the House that KPLC was a private company with the Government as one of the shareholders. At another point, he informed the House that ‘…KPLC is a Government parastatal, but a different parastatal from other parastatals. It is in a different category with other parastatals. There are parastatals which are not listed at the NSE. So this is different to that extent.’ The Government needs to be clear on whether KPLC is a Government Parastatal or a private company. The Committee notes the importance of KPLC to service delivery in the country and that the achievement of Vision 2030 depends on the success of the electricity sector. It is evident that the Government largely supports KPLC through guaranteed loans and profit plough-backs and also appoints a majority of directors to the company’s Board of Directors. Further, the Company’s vehicles have blue registration number plates, a preserve of parastatals contributing to the uncertainty as to whether KPLC is a parastatal or a private company. Due to the importance of the electricity sector in the country and the regular support offered to KPLC, the Government should not allow KPLC to be in the control of business people who are motivated by profits at the expense of the citizens. KPLC could be termed a State Corporation if it was ‘wholly owned or controlled by the government or by a state corporation’ in accordance with the definition proffered in the State Corporations Act. Following the disposal of shares by NSSF, the Company does not meet the requirements stipulated for it to qualify as a state corporation. Furthermore, KPLC has not submitted fully to the provisions of the Public Audit Act, by having its accounts audited by the Controller and Auditor General and submitted to the National Assembly for examination by the Public Investments Committee (PIC). he Controller and Auditor General last submitted audited accounts for KPLC for the year 2001/2002. PIC queried the non submission of KPLC accounts for the subsequent years in its 12th Report of 2004. Thereafter, accounts for the financial year 2007/2008 were tabled in December 2009. That notwithstanding, in 2004 PIC examined the following non accounting issues:- i) KPLC’s pension’s scheme, ii) Contracts between KPLC and IPPs, iii) The general financial status of the company and iv) Supply of treated poles during the Financial year 2004/2005 (13th Report). The Committee therefore recommends that:- i) The Government proceeds with the conversion of some of its 7.85% redeemable non-cumulative preference shares (87.12 million shares which Treasury has approved) into ordinary shares at a ratio of 1:1 and retains the ordinary shares so as to raise its stake in KPLC to 75% thus qualifying the company as a parastatal. The Government’s shareholding in KPLC be determined by the shares held in the name of the Permanent Secretary, Treasury and not other state agencies who might later on dispose their shares without approval from the Treasury. Before unbundling of electricity generation from transmission and distribution in the 1990s, there were 5 major players in the power sector, namely Kenya Power Company (KPC), Tana River Development Company (TRDC), Tana and Athi Rivers Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC which changed its name to KenGen in 1998. The second step comprised consolidating all the power generation assets, owned by the five (5) parastatals under KenGen and the transmission and distribution assets under KPLC. By October 1999, all power generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to KenGen at ‘depreciated replacement costs’. Similarly, transmission and distribution assets owned by other entities were transferred to KPLC at depreciated replacement costs. The Committee recommends that, like the previous unbundling:- i) All assets under the REP since 1973 should be tracked and taken over and reflected in the books of REA. Currently such assets are owned by the Government but under KPLC. ii) All transmission assets should be tracked and taken over and reflected in the books of KETRACO. Currently such assets acquired before the formation of KETRACO in 2008, are owned by KPLC while KETRACO will own new assets that it will develop. KPLC should surrender all transmission assets to KETRACO. iii) All assets under geothermal exploration and extraction held by KenGen (including Olkaria I & II) should be taken over by GDC to avoid the Government competing with itself. The Committee notes that ERC has failed to deliver on its mandate especially with regards to protecting energy consumers. This is reflected in the high costs of electricity in Kenya as compared to its neighbours which is a key factor in driving investors out of the country. Further, the high electricity costs cause most Kenyans to resort to traditional sources of energy such as charcoal and firewood, further depleting our environment. While unbundling the electricity sub-sector, the Government intended to make the electricity clean, quality and affordable which is evidently not the case. The Committee also notes with concern that under the Energy Act, ERC is expected to ensure that the industry players such as KenGen remain profitable and viable which impacts negatively on the consumers despite the PPAs guaranteeing reasonable profits. The Committee therefore recommends that the Energy Act be amended and that ERC puts in place feedback mechanisms to ensure that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner. The Committee further recommends that the Government increase its subsidies for the transmission and operation costs so that they are not reflected in the tariffs and the consumer bills. The Committee notes that the public is misinformed on the operations of the various players in the power sector and recommends that the Government carry out public education to inform the public on the various initiatives and power players which will promote transparency in the energy sector. Further, the price variations reflected on the consumer bills should be demystified to the public. In conclusion what PS, Ministry of Information and Communications raises i.e. inviting Hon Rege who is Chairman of Energy and Information & Communication to shed light on how the Committees recommendations have been taken up by the relevant institutions. In conclusion and as noted in some earlier debate, energy is an enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At the national level, wood fuel and other biomass account for about 68% of the total primary energy consumption followed by petroleum at 22%, electricity at 9% and others including coal at about less than 1%. This is not sustainable as electricity providing less than 10% of energy yet we plan to industrialize! The October 2011 National Energy Conference revealed that even the 20+% oli bill almost 10% goes to burn in diesel generators to produce the expensive fuel levy reflected in electricity bills. While making Dr. Ndemo play Presidential aspirant it was concluded that while electricity has the least Cost Power Development Plan team doing 20 year rolling plans no such activity is in the oil sector! Is that by design or its a long term oversight? Wood (read biomass) never got any country on earth industrialized and hence government cannot (should not) wait for Independent Power Producers to invest in energy, as the easiest return (short term of course) is in charcoal burning, followed by burning oil (again returns occur in less than a Parliamentary term) not putting up a nuclear power plant. Best wishes for 2012 to all. David On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market.
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France.
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
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David, The representation I referred to is one from a famous speech by former US President, Abraham Lincoln's Gettysburg address. He stated that "this nation, under God, shall have a new birth of freedom --- and that government of the people, by the people, for the people, shall not perish from the earth". Representation is by our MPs who we can choose to remove. The government is therefore us and we govern through proxies in Parliament. I was therefore encouraging Solomon that if government is the problem to sufficient supply of energy, we can force our desires through our proxies. We should not be complaining if we hold Lincoln's statement to be true. Representation and our desires should not be unrelated. Governance demands that both the governed and governors should be a lert. Under the new constitution anyone can bring a class action if you feel things are not right. In Kenya if you say the price of sugar will go up, they rush to buy more sugar. If you raise price for energy, they forgo bread and faithfully pay the bill. This what I call anti thesis (against the normal) to economic behaviour. Under normal circumstances, when price for bread goes up, we should either forgo bread all together or find sabstitutes. Such actions are the ones that can reduce the price of bread. Similarly, when the cost of energy goes up, we should move towards the sabstitutes even if it is a monopoly situation. By now we should have built solar to such levels that we can force KPLC to be considerate in pricing. Instead of a large government that we plan to create, through representation we can push for subsidy in electricity since availability of power leads to more production and beneficial to the economy. So the first ammendment to the constitution should be a reduced government. Hon. Kioni's proposal to remove the senate should be improved to lower the number of elected leaders. I hope my write up will be understood. Ndemo. Sent from my BlackBerry® -----Original Message----- From: David Otwoma <otwomad@gmail.com> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Sun, 1 Jan 2012 22:35:06 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Solomon, Having moved from Science & Technology (under Ministry of Higher Education, Science and Technology) to Nuclear Electricity Project (under Ministry of Energy) there are some perceptions that the PS of Information & Communication have that needs further interrogating. While working outside Kenya (1998 to 2006) I was privileged to visit many countries that operated nuclear power plants for electricity generation and will share experiences from a few. In France the energy giant is called EDF.see http://france.edf.com/france-45634.html It is like combining Kenya Power (distributors), KETRACO (transmitters), KenGen (generators) and a myriad of others e.g. Nuclear Electricity Project, Geothermal Development Co, Rural Electrification, etc. EDF owns power stations (58 nuclear power plants, coal and gas power generators, hydro power stations). EDF also owns the transmission lines (for both high and low voltages) and EDF is also a great marketer (sells electricity to over 30 million customers in France and over 25 million outside France). Yet the government of France owns the lion share in EDF. What we call here Independent Power Producers are insignificant in France. In fact the regulators, who for example control the nuclear power infrastructure (called the French Nuclear Safety Authority see http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2 selected by the President, 1 by the Prime Minister –the French have a system whereby the losing party produces the prime Minister – one by the equivalent of COTU, one by the professional in the nuclear industry). This is similar to USA where Nuclear Regulatory Commission also has 5 Commissioners, 3 chosen by the party in power and 2 by the losing party. In both France and USA nuclear is therefore a national matter and is not reduced to part politics. In USA by contrast what we call here IPP reign supreme. In nuclear for example some equivalents of our Tana and Arthi River Develoment Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own both hydro and nuclear power plants. Municipalities too own power companies. So too do equivalents of IPPs here. Different entities also own transmission and distribution lines. What is in USA is more of an exception and not the rule. The rules/laws in USA for example would not tolerate a scenario where a serving people’s representative (in Senate or Congress) would be a wanted person for deals done when s/he was a Secretary (of State, Energy, Treasury etc.) and a former MD (President in USA energy firm) would be ‘respectable’ public figures after questions bordering on criminality arise. Most of the world (Russia, China, Japan, South Korea, Iran, Egypt, etc.) the government irrespective of the party in power plays a very visible role in energy generation, transmission, distribution and marketing. In Egypt for example electricity is cheaper for manufacturers (hence fruits grown in Egypt by irrigation using electricity to pump water from the nile to orchards are cheaper in Kenya than our own locally produced fruits with rain fed agriculture!) and heavily subsidized for the population so as to ensure 98% electrification (Kenya we are just blow 20% while in Hungary upto year 1999 every human habitation it was the duty of the government to connect it with electricity that costs less than kshs. 40 per month for the dweller then irrespective of consumption). Hansard has a report with the following in it. The Energy Act 2006 removes monopoly of Kenya Power as distributor. The Committee on Energy, Communications and Information was constituted on June 17th 2009 and its membership is as follows:- 1. The Hon. (Eng.) James Rege, M.P. Chairman 2. The Hon. Maina Kamau, M.P Vice Chairman 3. The Hon. Danson Mwazo Mwakulegwa, M.P 4. The Hon. Mohamed Hussein Ali, M.P 5. The Hon. (Eng.) Nicholas Gumbo, M.P 6. The Hon. Edwin O. Yinda, M.P 7. The Hon. Emilio Kathuri, M.P 8. The Hon. Ekwee Ethuro ,M.P 9. The Hon. (Prof.) Phillip Kaloki, M.P 10. The Hon. Cyprian Omolo, M.P The Committee is mandated to consider:- • Development, production, maintenance and regulation of Energy. • Communication. • Information. • Broadcasting, and • Information Communications Technology (ICT) development. The Committee executes its mandate in accordance with the provisions of Standing Order 198 (3), which is – a) to investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned Ministries and Departments; b) to Study the programme and policy objectives on Ministries and Departments and the effectiveness of the implementation; c) to Study and review all legislation referred to it; d) to study, assess and analyze the relative success of the Ministries and departments as measured by the results obtained as compared with their stated objectives; e) to investigate and enquire into all matters relating to the assigned Ministries and departments as they may deem necessary, and as may be referred to them by the House or a Minister; and f) to make reports and recommendations to the House as often as possible, including recommendation of proposed legislation. Further, Standing Order No. 152 provide that:- (1) Upon being laid before the National Assembly, the Annual Estimates shall stand committed to the respective Departmental Committees according to their mandates. (2) Each Departmental Committee shall consider, discuss and review the Estimates committed to it under this standing order and submit its report thereon to the House within twenty one days after they were first laid before the House. Ministries assigned In executing its oversight mandate the Committee oversees the following Ministries:- i) Ministry of Energy ii) Ministry of Information and Communications. On Wednesday14th April, 2010 during the Afternoon Sitting, the Member of Parliament for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the following Question by Private Notice. a. What is the relationship between Kenya Power and Lighting Company (KPLC) and Rural Electrification Authority (REA)? b. How much money has the Ministry paid to KPLC through REA since its inception to date? c. Could the Minister provide details of the amount paid as dividends to the major shareholders of KPLC since its privatization? In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on Tuesday 16th March, 2010 asked a Question on overcharging of electricity consumers by KPLC. The two questions elicited a lot of interest from Members who sought to know whether KPLC is a parastatal or a private company, its shareholders, whether it receives funding or financial support from the Government, its working relationship with REA, the amount of dividends it had paid to its shareholders over time and other issues surrounding its ownership and management. As a result, on 14th April, 2010, the Speaker directed that the Departmental Committee on Energy, Communication and Information should take up this matter and file a report in the House. KPLC is a public company that was incorporated in 1922 as a private company and was later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the government bought KPLC shares totaling to 32,853,268 which represents 40.4% of the voting shares of the Company. It is responsible for transmission, distribution and retail supply of electrical energy to end users. It purchases power in bulk from KenGen and the IPPs through bilateral contracts or Power Purchase Agreements (PPAs) approved by ERC. KPLC is responsible for ensuring that there is adequate line capacity to maintain supply and quality of electricity across the country. The interconnected network of transmission and distribution lines covers about 41,486 kilometers. It has more than 1,500,000 customers who consumed over 5,432 Gigawatt hours of electricity in the financial year 2008/9. During the year, the maximum daily electricity peak demand recorded was 1,072 MW. The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely liberalized the energy sector in the country which was started in 1997 when KenGen was formed out of KPLC. The Policy Paper among others established a single energy regulator and unbundled KPLC to form KETRACO, REA and GDC. KPLC is the only licensed supplier, distributor and retailer of electrical energy in Kenya KPLC is a single buyer for all the power generated in Kenya and injected into the interconnected grid for sale to the consumers. The trading arrangements between KPLC and each of the generators are governed by a long-term Power Purchase Agreement (PPA) approved by ERC. Such PPAs comprise capacity charge, energy charge, fuel pass through and inflation indexed clauses. The retail tariff structure comprises of a fixed charge, energy charge and capacity charge. On Wednesday 14th April, 2010, while answering a Question by Private Notice by Hon. B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was not clear on whether KPLC is a parastatal or not. At one point he informed the House that KPLC was a private company with the Government as one of the shareholders. At another point, he informed the House that ‘…KPLC is a Government parastatal, but a different parastatal from other parastatals. It is in a different category with other parastatals. There are parastatals which are not listed at the NSE. So this is different to that extent.’ The Government needs to be clear on whether KPLC is a Government Parastatal or a private company. The Committee notes the importance of KPLC to service delivery in the country and that the achievement of Vision 2030 depends on the success of the electricity sector. It is evident that the Government largely supports KPLC through guaranteed loans and profit plough-backs and also appoints a majority of directors to the company’s Board of Directors. Further, the Company’s vehicles have blue registration number plates, a preserve of parastatals contributing to the uncertainty as to whether KPLC is a parastatal or a private company. Due to the importance of the electricity sector in the country and the regular support offered to KPLC, the Government should not allow KPLC to be in the control of business people who are motivated by profits at the expense of the citizens. KPLC could be termed a State Corporation if it was ‘wholly owned or controlled by the government or by a state corporation’ in accordance with the definition proffered in the State Corporations Act. Following the disposal of shares by NSSF, the Company does not meet the requirements stipulated for it to qualify as a state corporation. Furthermore, KPLC has not submitted fully to the provisions of the Public Audit Act, by having its accounts audited by the Controller and Auditor General and submitted to the National Assembly for examination by the Public Investments Committee (PIC). he Controller and Auditor General last submitted audited accounts for KPLC for the year 2001/2002. PIC queried the non submission of KPLC accounts for the subsequent years in its 12th Report of 2004. Thereafter, accounts for the financial year 2007/2008 were tabled in December 2009. That notwithstanding, in 2004 PIC examined the following non accounting issues:- i) KPLC’s pension’s scheme, ii) Contracts between KPLC and IPPs, iii) The general financial status of the company and iv) Supply of treated poles during the Financial year 2004/2005 (13th Report). The Committee therefore recommends that:- i) The Government proceeds with the conversion of some of its 7.85% redeemable non-cumulative preference shares (87.12 million shares which Treasury has approved) into ordinary shares at a ratio of 1:1 and retains the ordinary shares so as to raise its stake in KPLC to 75% thus qualifying the company as a parastatal. The Government’s shareholding in KPLC be determined by the shares held in the name of the Permanent Secretary, Treasury and not other state agencies who might later on dispose their shares without approval from the Treasury. Before unbundling of electricity generation from transmission and distribution in the 1990s, there were 5 major players in the power sector, namely Kenya Power Company (KPC), Tana River Development Company (TRDC), Tana and Athi Rivers Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC which changed its name to KenGen in 1998. The second step comprised consolidating all the power generation assets, owned by the five (5) parastatals under KenGen and the transmission and distribution assets under KPLC. By October 1999, all power generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to KenGen at ‘depreciated replacement costs’. Similarly, transmission and distribution assets owned by other entities were transferred to KPLC at depreciated replacement costs. The Committee recommends that, like the previous unbundling:- i) All assets under the REP since 1973 should be tracked and taken over and reflected in the books of REA. Currently such assets are owned by the Government but under KPLC. ii) All transmission assets should be tracked and taken over and reflected in the books of KETRACO. Currently such assets acquired before the formation of KETRACO in 2008, are owned by KPLC while KETRACO will own new assets that it will develop. KPLC should surrender all transmission assets to KETRACO. iii) All assets under geothermal exploration and extraction held by KenGen (including Olkaria I & II) should be taken over by GDC to avoid the Government competing with itself. The Committee notes that ERC has failed to deliver on its mandate especially with regards to protecting energy consumers. This is reflected in the high costs of electricity in Kenya as compared to its neighbours which is a key factor in driving investors out of the country. Further, the high electricity costs cause most Kenyans to resort to traditional sources of energy such as charcoal and firewood, further depleting our environment. While unbundling the electricity sub-sector, the Government intended to make the electricity clean, quality and affordable which is evidently not the case. The Committee also notes with concern that under the Energy Act, ERC is expected to ensure that the industry players such as KenGen remain profitable and viable which impacts negatively on the consumers despite the PPAs guaranteeing reasonable profits. The Committee therefore recommends that the Energy Act be amended and that ERC puts in place feedback mechanisms to ensure that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner. The Committee further recommends that the Government increase its subsidies for the transmission and operation costs so that they are not reflected in the tariffs and the consumer bills. The Committee notes that the public is misinformed on the operations of the various players in the power sector and recommends that the Government carry out public education to inform the public on the various initiatives and power players which will promote transparency in the energy sector. Further, the price variations reflected on the consumer bills should be demystified to the public. In conclusion what PS, Ministry of Information and Communications raises i.e. inviting Hon Rege who is Chairman of Energy and Information & Communication to shed light on how the Committees recommendations have been taken up by the relevant institutions. In conclusion and as noted in some earlier debate, energy is an enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At the national level, wood fuel and other biomass account for about 68% of the total primary energy consumption followed by petroleum at 22%, electricity at 9% and others including coal at about less than 1%. This is not sustainable as electricity providing less than 10% of energy yet we plan to industrialize! The October 2011 National Energy Conference revealed that even the 20+% oli bill almost 10% goes to burn in diesel generators to produce the expensive fuel levy reflected in electricity bills. While making Dr. Ndemo play Presidential aspirant it was concluded that while electricity has the least Cost Power Development Plan team doing 20 year rolling plans no such activity is in the oil sector! Is that by design or its a long term oversight? Wood (read biomass) never got any country on earth industrialized and hence government cannot (should not) wait for Independent Power Producers to invest in energy, as the easiest return (short term of course) is in charcoal burning, followed by burning oil (again returns occur in less than a Parliamentary term) not putting up a nuclear power plant. Best wishes for 2012 to all. David On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market.
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France.
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
_______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Ladies and Gentlemen, David's well articulated summary herein below on the going's on in the Energy Sector to date ( David I hope you do not mind working on an Energy concept Paper as requested by the Vision 2030), quite clearly indicates that we are in the woods as we have stated before. It is imperative that we realize that if we have to bring energy efficiencies to speed and develop & industrialize this economy, electricity has to lead from the front. It therefore follows that we must streamline the main players – very critical. We cannot tolerate a situation where investors are in full flight citing the high cost of electricity to set up industry here at home, while neighboring countries can easily accommodate their needs. I suppose that we can note with satisfaction the efforts being undertaken in electricity generation so far, as earlier assessed. However we have to address the distribution sector. For me, I would be keen on three areas: 1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’ to date, we need to resolve this now. Does this interfere in any way with operational/pricing efficiencies filtering to the consumers? There needs to be transparency with a critical national utility Service provider such as this.. So can the right honorable gentlemen please clear the air on this? Grace.., possibly we could request Hon Rege for comment on this or get on board an active member of the Committee on Energy..? 2. Monopoly – We still insist - Competition breeds competencies. Can we systematically begin working on breaking up the monopoly setup we currently have in place. What happened to the Energy Act 2006 that was to remove monopoly of Kenya Power as distributor …? 3. ERC – Am still yet to fully comprehend the makeup structure/mandate. Can we make it work better – especially, on Electricity/Oil..? Bw PS, while we may fully agree that Solar energy is a viable alternative am afraid that by our standards here and now, we can only develop some small scale domestic consumption in the short term. This won’t really make any much dent in KPLC’s side. Meanwhile, we are discussing driving economy /industrial growth in the mid-term/long term for Vision 2030. Electricity has to carry out the job and drive this. The general concern we all share right now is that, while we are actively scaling up efforts to generate more power to fuel our growth, we might just have to content with a bottleneck distribution, and this is currently only done by KPLC and so far, this state of affairs is quite unsatisfactory. Harry -----Original Message----- From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke] On Behalf Of David Otwoma Sent: Sunday, January 01, 2012 10:35 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Solomon, Having moved from Science & Technology (under Ministry of Higher Education, Science and Technology) to Nuclear Electricity Project (under Ministry of Energy) there are some perceptions that the PS of Information & Communication have that needs further interrogating. While working outside Kenya (1998 to 2006) I was privileged to visit many countries that operated nuclear power plants for electricity generation and will share experiences from a few. In France the energy giant is called EDF.see http://france.edf.com/france-45634.html It is like combining Kenya Power (distributors), KETRACO (transmitters), KenGen (generators) and a myriad of others e.g. Nuclear Electricity Project, Geothermal Development Co, Rural Electrification, etc. EDF owns power stations (58 nuclear power plants, coal and gas power generators, hydro power stations). EDF also owns the transmission lines (for both high and low voltages) and EDF is also a great marketer (sells electricity to over 30 million customers in France and over 25 million outside France). Yet the government of France owns the lion share in EDF. What we call here Independent Power Producers are insignificant in France. In fact the regulators, who for example control the nuclear power infrastructure (called the French Nuclear Safety Authority see http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2 selected by the President, 1 by the Prime Minister –the French have a system whereby the losing party produces the prime Minister – one by the equivalent of COTU, one by the professional in the nuclear industry). This is similar to USA where Nuclear Regulatory Commission also has 5 Commissioners, 3 chosen by the party in power and 2 by the losing party. In both France and USA nuclear is therefore a national matter and is not reduced to part politics. In USA by contrast what we call here IPP reign supreme. In nuclear for example some equivalents of our Tana and Arthi River Develoment Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own both hydro and nuclear power plants. Municipalities too own power companies. So too do equivalents of IPPs here. Different entities also own transmission and distribution lines. What is in USA is more of an exception and not the rule. The rules/laws in USA for example would not tolerate a scenario where a serving people’s representative (in Senate or Congress) would be a wanted person for deals done when s/he was a Secretary (of State, Energy, Treasury etc.) and a former MD (President in USA energy firm) would be ‘respectable’ public figures after questions bordering on criminality arise. Most of the world (Russia, China, Japan, South Korea, Iran, Egypt, etc.) the government irrespective of the party in power plays a very visible role in energy generation, transmission, distribution and marketing. In Egypt for example electricity is cheaper for manufacturers (hence fruits grown in Egypt by irrigation using electricity to pump water from the nile to orchards are cheaper in Kenya than our own locally produced fruits with rain fed agriculture!) and heavily subsidized for the population so as to ensure 98% electrification (Kenya we are just blow 20% while in Hungary upto year 1999 every human habitation it was the duty of the government to connect it with electricity that costs less than kshs. 40 per month for the dweller then irrespective of consumption). Hansard has a report with the following in it. The Energy Act 2006 removes monopoly of Kenya Power as distributor. The Committee on Energy, Communications and Information was constituted on June 17th 2009 and its membership is as follows:- 1. The Hon. (Eng.) James Rege, M.P. Chairman 2. The Hon. Maina Kamau, M.P Vice Chairman 3. The Hon. Danson Mwazo Mwakulegwa, M.P 4. The Hon. Mohamed Hussein Ali, M.P 5. The Hon. (Eng.) Nicholas Gumbo, M.P 6. The Hon. Edwin O. Yinda, M.P 7. The Hon. Emilio Kathuri, M.P 8. The Hon. Ekwee Ethuro ,M.P 9. The Hon. (Prof.) Phillip Kaloki, M.P 10. The Hon. Cyprian Omolo, M.P The Committee is mandated to consider:- • Development, production, maintenance and regulation of Energy. • Communication. • Information. • Broadcasting, and • Information Communications Technology (ICT) development. The Committee executes its mandate in accordance with the provisions of Standing Order 198 (3), which is – a) to investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned Ministries and Departments; b) to Study the programme and policy objectives on Ministries and Departments and the effectiveness of the implementation; c) to Study and review all legislation referred to it; d) to study, assess and analyze the relative success of the Ministries and departments as measured by the results obtained as compared with their stated objectives; e) to investigate and enquire into all matters relating to the assigned Ministries and departments as they may deem necessary, and as may be referred to them by the House or a Minister; and f) to make reports and recommendations to the House as often as possible, including recommendation of proposed legislation. Further, Standing Order No. 152 provide that:- (1) Upon being laid before the National Assembly, the Annual Estimates shall stand committed to the respective Departmental Committees according to their mandates. (2) Each Departmental Committee shall consider, discuss and review the Estimates committed to it under this standing order and submit its report thereon to the House within twenty one days after they were first laid before the House. Ministries assigned In executing its oversight mandate the Committee oversees the following Ministries:- i) Ministry of Energy ii) Ministry of Information and Communications. On Wednesday14th April, 2010 during the Afternoon Sitting, the Member of Parliament for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the following Question by Private Notice. a. What is the relationship between Kenya Power and Lighting Company (KPLC) and Rural Electrification Authority (REA)? b. How much money has the Ministry paid to KPLC through REA since its inception to date? c. Could the Minister provide details of the amount paid as dividends to the major shareholders of KPLC since its privatization? In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on Tuesday 16th March, 2010 asked a Question on overcharging of electricity consumers by KPLC. The two questions elicited a lot of interest from Members who sought to know whether KPLC is a parastatal or a private company, its shareholders, whether it receives funding or financial support from the Government, its working relationship with REA, the amount of dividends it had paid to its shareholders over time and other issues surrounding its ownership and management. As a result, on 14th April, 2010, the Speaker directed that the Departmental Committee on Energy, Communication and Information should take up this matter and file a report in the House. KPLC is a public company that was incorporated in 1922 as a private company and was later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the government bought KPLC shares totaling to 32,853,268 which represents 40.4% of the voting shares of the Company. It is responsible for transmission, distribution and retail supply of electrical energy to end users. It purchases power in bulk from KenGen and the IPPs through bilateral contracts or Power Purchase Agreements (PPAs) approved by ERC. KPLC is responsible for ensuring that there is adequate line capacity to maintain supply and quality of electricity across the country. The interconnected network of transmission and distribution lines covers about 41,486 kilometers. It has more than 1,500,000 customers who consumed over 5,432 Gigawatt hours of electricity in the financial year 2008/9. During the year, the maximum daily electricity peak demand recorded was 1,072 MW. The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely liberalized the energy sector in the country which was started in 1997 when KenGen was formed out of KPLC. The Policy Paper among others established a single energy regulator and unbundled KPLC to form KETRACO, REA and GDC. KPLC is the only licensed supplier, distributor and retailer of electrical energy in Kenya KPLC is a single buyer for all the power generated in Kenya and injected into the interconnected grid for sale to the consumers. The trading arrangements between KPLC and each of the generators are governed by a long-term Power Purchase Agreement (PPA) approved by ERC. Such PPAs comprise capacity charge, energy charge, fuel pass through and inflation indexed clauses. The retail tariff structure comprises of a fixed charge, energy charge and capacity charge. On Wednesday 14th April, 2010, while answering a Question by Private Notice by Hon. B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was not clear on whether KPLC is a parastatal or not. At one point he informed the House that KPLC was a private company with the Government as one of the shareholders. At another point, he informed the House that ‘…KPLC is a Government parastatal, but a different parastatal from other parastatals. It is in a different category with other parastatals. There are parastatals which are not listed at the NSE. So this is different to that extent.’ The Government needs to be clear on whether KPLC is a Government Parastatal or a private company. The Committee notes the importance of KPLC to service delivery in the country and that the achievement of Vision 2030 depends on the success of the electricity sector. It is evident that the Government largely supports KPLC through guaranteed loans and profit plough-backs and also appoints a majority of directors to the company’s Board of Directors. Further, the Company’s vehicles have blue registration number plates, a preserve of parastatals contributing to the uncertainty as to whether KPLC is a parastatal or a private company. Due to the importance of the electricity sector in the country and the regular support offered to KPLC, the Government should not allow KPLC to be in the control of business people who are motivated by profits at the expense of the citizens. KPLC could be termed a State Corporation if it was ‘wholly owned or controlled by the government or by a state corporation’ in accordance with the definition proffered in the State Corporations Act. Following the disposal of shares by NSSF, the Company does not meet the requirements stipulated for it to qualify as a state corporation. Furthermore, KPLC has not submitted fully to the provisions of the Public Audit Act, by having its accounts audited by the Controller and Auditor General and submitted to the National Assembly for examination by the Public Investments Committee (PIC). he Controller and Auditor General last submitted audited accounts for KPLC for the year 2001/2002. PIC queried the non submission of KPLC accounts for the subsequent years in its 12th Report of 2004. Thereafter, accounts for the financial year 2007/2008 were tabled in December 2009. That notwithstanding, in 2004 PIC examined the following non accounting issues:- i) KPLC’s pension’s scheme, ii) Contracts between KPLC and IPPs, iii) The general financial status of the company and iv) Supply of treated poles during the Financial year 2004/2005 (13th Report). The Committee therefore recommends that:- i) The Government proceeds with the conversion of some of its 7.85% redeemable non-cumulative preference shares (87.12 million shares which Treasury has approved) into ordinary shares at a ratio of 1:1 and retains the ordinary shares so as to raise its stake in KPLC to 75% thus qualifying the company as a parastatal. The Government’s shareholding in KPLC be determined by the shares held in the name of the Permanent Secretary, Treasury and not other state agencies who might later on dispose their shares without approval from the Treasury. Before unbundling of electricity generation from transmission and distribution in the 1990s, there were 5 major players in the power sector, namely Kenya Power Company (KPC), Tana River Development Company (TRDC), Tana and Athi Rivers Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC which changed its name to KenGen in 1998. The second step comprised consolidating all the power generation assets, owned by the five (5) parastatals under KenGen and the transmission and distribution assets under KPLC. By October 1999, all power generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to KenGen at ‘depreciated replacement costs’. Similarly, transmission and distribution assets owned by other entities were transferred to KPLC at depreciated replacement costs. The Committee recommends that, like the previous unbundling:- i) All assets under the REP since 1973 should be tracked and taken over and reflected in the books of REA. Currently such assets are owned by the Government but under KPLC. ii) All transmission assets should be tracked and taken over and reflected in the books of KETRACO. Currently such assets acquired before the formation of KETRACO in 2008, are owned by KPLC while KETRACO will own new assets that it will develop. KPLC should surrender all transmission assets to KETRACO. iii) All assets under geothermal exploration and extraction held by KenGen (including Olkaria I & II) should be taken over by GDC to avoid the Government competing with itself. The Committee notes that ERC has failed to deliver on its mandate especially with regards to protecting energy consumers. This is reflected in the high costs of electricity in Kenya as compared to its neighbours which is a key factor in driving investors out of the country. Further, the high electricity costs cause most Kenyans to resort to traditional sources of energy such as charcoal and firewood, further depleting our environment. While unbundling the electricity sub-sector, the Government intended to make the electricity clean, quality and affordable which is evidently not the case. The Committee also notes with concern that under the Energy Act, ERC is expected to ensure that the industry players such as KenGen remain profitable and viable which impacts negatively on the consumers despite the PPAs guaranteeing reasonable profits. The Committee therefore recommends that the Energy Act be amended and that ERC puts in place feedback mechanisms to ensure that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner. The Committee further recommends that the Government increase its subsidies for the transmission and operation costs so that they are not reflected in the tariffs and the consumer bills. The Committee notes that the public is misinformed on the operations of the various players in the power sector and recommends that the Government carry out public education to inform the public on the various initiatives and power players which will promote transparency in the energy sector. Further, the price variations reflected on the consumer bills should be demystified to the public. In conclusion what PS, Ministry of Information and Communications raises i.e. inviting Hon Rege who is Chairman of Energy and Information & Communication to shed light on how the Committees recommendations have been taken up by the relevant institutions. In conclusion and as noted in some earlier debate, energy is an enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At the national level, wood fuel and other biomass account for about 68% of the total primary energy consumption followed by petroleum at 22%, electricity at 9% and others including coal at about less than 1%. This is not sustainable as electricity providing less than 10% of energy yet we plan to industrialize! The October 2011 National Energy Conference revealed that even the 20+% oli bill almost 10% goes to burn in diesel generators to produce the expensive fuel levy reflected in electricity bills. While making Dr. Ndemo play Presidential aspirant it was concluded that while electricity has the least Cost Power Development Plan team doing 20 year rolling plans no such activity is in the oil sector! Is that by design or its a long term oversight? Wood (read biomass) never got any country on earth industrialized and hence government cannot (should not) wait for Independent Power Producers to invest in energy, as the easiest return (short term of course) is in charcoal burning, followed by burning oil (again returns occur in less than a Parliamentary term) not putting up a nuclear power plant. Best wishes for 2012 to all. David On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr. Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking investment
in
energy. This is what we are trying to address: The role of government in
enterprise. If you go deeper into Schumpeter's theory, you will find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the
idea
saying there were enough messengers around. With the invention of mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called "creative
destruction".
We must understand this theory if indeed we want to survive in the days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to light up
street lights. This innovation even in Kenya does not require government
approval. Further we have enriched the Arab world far too long when we
use
parrafin to power our rudimentally oil lamps. Instead we should by now
have
provided a simple battery, a solar panel and a micro wind vane to every
household for energy supply. This will save us billions of dollars that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced
economies. Your approach would fail. You must first create the market
through simple understandable solutions. The demands for energy will then
be incremental such that even if you were to build 10,000 MW you have a
ready market.
On colonialism; This is non sense in my view. Those who colonized us are
dead and most of those who were colonized are dead too. We must not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them but they
have not spent their lives grumbling about the past. They have faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be
grateful that the British colonized us. The British were only interested
in
domination and material wealth. The French's integration approach still
has
implications on their colonies. Indeed as I write there are Africans in
Africa who consider themselves French. There are African states that
still
pay French tax. Mineral resources on African continent still belong to
France.
I have nothing against the French. If our Francophone brothers feel
comfortable this way, let it be. The best we can do is to face up to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us. Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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sector in support of the national aim of ICT enabled growth and
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regulation. The network aims to act as a catalyst for reform in the ICT
sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors
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_______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/harry%40comtelsys.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Harry, Thank you for your email with suggestion of Energy concept Paper. However, the Ministry of Energy in conjunction with all players in energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an National Energy Policy. A second draft was produced in December 2011 and will ask tomorrow if its allowed to circulate it and communicate accordingly. A number of my colleagues are on the drafting Committees (there is the Executive composed of PS, MoE; the MDs of ERC, GDC, KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers, engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA etc.). Last timetable I have possession of envisages the National Energy Policy being ready in early 2013. Usually such a Policy would become a Sessional Paper (as the one of 2004 that led to the Energy Act of 2006) once adopted by the Cabinet. Thereafter its recommendations (legislation setting and regulatory matters if enacted by Parliament become law) are the ones which may be for public consumption. But we now have a Constitution that stipulates power emanates from the people....not oozing from the Executive so.... On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we should move towards the sabstitutes even if it is a monopoly situation. By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.’ After he once advised me to watch ‘Field of Dreams’ I somehow managed to get a few of the team members of the Least Cost Power Development Plan on my side and since then I consider him a very progressive ally. Only last week an aquittance born, bred and from Scandinavia categorically informed me he is relocating permanently to our part of the world after more than 40 years working in the north. His logic is that ‘we (Kenyans) are always fighting over a small cake when all around us there is flour, baking powder, sugar and energy to bake very many small cakes enough for all of us’. That reminded me of ‘Field of Dreams’. Every time you see a small, medium and big building (house) be it in uptown Runda or Mathare/Kibera informal settlement…anywhere dotted along the roads/paths we drive/walk….it is a potential solar centre. Only Ghana, at the close of 2011, in Africa is committed to implementing smart grid technology. This is a no brainer as China, Germany among other already use it. If you have solar on your building during the day it saves you energy (converted to electricity when you need it). Any excess may be offloaded to the grid who when they balance their books either request for extra payment of make you a cheque if you used less than you generated. If you have driven/walked along Parliament road at night the street lights there use solar. Why the City Council of Nairobi, Mombasa Municipal, Kisumu and all those other county councils cannot replicate this is a mystery to me! All schools, health centers, market places etc would also be having the same.Dr. Ndemo is spot on when he says ‘By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.’ as what is lacking in our beloved Kenya is the will. All those power pylons may be made to each house unlike the current situation where Kenyans 'beg' REA and/or KPLC to bring poles to them after paying upfront. We need the implementation of the smart grid technology locally…but remember Ghana is politically more mature than Kenya (they already know who will be the Presidential hopefuls when they hold their elections this year and additionally the two main parties are issue based not individual based) and that contributed to their economic growth being 14% (according to the ruling party but 8% according to the main opposing party). David On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in the Energy Sector to date ( David I hope you do not mind working on an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods as we have stated before.
It is imperative that we realize that if we have to bring energy efficiencies to speed and develop & industrialize this economy, electricity has to lead from the front.
It therefore follows that we must streamline the main players – very critical. We cannot tolerate a situation where investors are in full flight citing the high cost of
electricity to set up industry here at home, while neighboring countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being undertaken in electricity generation so far, as earlier assessed. However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’ to date, we need to resolve this now. Does this interfere in any way with operational/pricing efficiencies filtering to the consumers? There needs to be transparency with a critical national utility Service provider such as this.. So can the right honorable gentlemen please clear the air on this? Grace.., possibly we could request Hon Rege for comment on this or get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can we systematically begin working on breaking up the monopoly setup we currently have in place. What happened to the Energy Act 2006 that was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate. Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable alternative am afraid that by our standards here and now, we can only develop some small scale domestic consumption in the short term. This won’t
really make any much dent in KPLC’s side. Meanwhile, we are discussing driving economy /industrial growth in the mid-term/long term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are actively scaling up efforts to generate more power to fuel our growth, we might just have to content with a bottleneck distribution, and this is currently only done by KPLC and so far, this state of affairs is quite unsatisfactory.
Harry
-----Original Message----- From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke] On Behalf Of David Otwoma Sent: Sunday, January 01, 2012 10:35 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating to
the mandate,
management, activities, administration, operations and estimates of the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the Ministries and
departments as measured by the results obtained as compared with their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual Estimates
shall stand
committed to the respective Departmental Committees according to their
mandates.
(2) Each Departmental Committee shall consider, discuss and review the Estimates
committed to it under this standing order and submit its report thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April, 2010, the
Speaker directed that the Departmental Committee on Energy, Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in the
financial year
2008/9. During the year, the maximum daily electricity peak demand recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen was
formed out of
KPLC. The Policy Paper among others established a single energy regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government should not allow
KPLC to be in the control of business people who are motivated by profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85% redeemable
non-cumulative preference shares (87.12 million shares which Treasury has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares held in the
name of the Permanent Secretary, Treasury and not other state agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999, all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission and
distribution
assets owned by other entities were transferred to KPLC at depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken over and
reflected in the books of REA. Currently such assets are owned by the Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing reasonable
profits. The Committee therefore recommends that the Energy Act be amended and
that ERC puts in place feedback mechanisms to ensure that demand is met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its subsidies for
the transmission and operation costs so that they are not reflected in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest return
(short term of course) is in charcoal burning, followed by burning oil
(again returns occur in less than a Parliamentary term) not putting up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr. Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking investment
in
energy. This is what we are trying to address: The role of government in
enterprise. If you go deeper into Schumpeter's theory, you will find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the
idea
saying there were enough messengers around. With the invention of mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called "creative
destruction".
We must understand this theory if indeed we want to survive in the days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to light up
street lights. This innovation even in Kenya does not require government
approval. Further we have enriched the Arab world far too long when we
use
parrafin to power our rudimentally oil lamps. Instead we should by now
have
provided a simple battery, a solar panel and a micro wind vane to every
household for energy supply. This will save us billions of dollars that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced
economies. Your approach would fail. You must first create the market
through simple understandable solutions. The demands for energy will then
be incremental such that even if you were to build 10,000 MW you have a
ready market.
On colonialism; This is non sense in my view. Those who colonized us are
dead and most of those who were colonized are dead too. We must not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them but they
have not spent their lives grumbling about the past. They have faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be
grateful that the British colonized us. The British were only interested
in
domination and material wealth. The French's integration approach still
has
implications on their colonies. Indeed as I write there are Africans in
Africa who consider themselves French. There are African states that
still
pay French tax. Mineral resources on African continent still belong to
France.
I have nothing against the French. If our Francophone brothers feel
comfortable this way, let it be. The best we can do is to face up to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us. Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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Thanks David, Looking at the list of technocrats mentioned working on the National Energy Policy, it looks to me the policy drafting is restricted to the Energy sector technocrats. It doesn't look like we have any broad based representation that cuts across the entire Public sector spectrum, especially when it comes to dealing with such a crucial sector. I thought, this is the spirit and letter under the new constitution..? And is vision 2030 represented to ensure the policy is in tune with the vision - I suppose then we can seek to make input via their delegation on the team. Any possibility, that you got your hands on the draft document for our review...? More later, as we check out the resources you gave out.. Many thanks, once again.. Regards, Harry -----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Monday, January 02, 2012 10:37 AM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Harry, Thank you for your email with suggestion of Energy concept Paper. However, the Ministry of Energy in conjunction with all players in energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an National Energy Policy. A second draft was produced in December 2011 and will ask tomorrow if its allowed to circulate it and communicate accordingly. A number of my colleagues are on the drafting Committees (there is the Executive composed of PS, MoE; the MDs of ERC, GDC, KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers, engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA etc.). Last timetable I have possession of envisages the National Energy Policy being ready in early 2013. Usually such a Policy would become a Sessional Paper (as the one of 2004 that led to the Energy Act of 2006) once adopted by the Cabinet. Thereafter its recommendations (legislation setting and regulatory matters if enacted by Parliament become law) are the ones which may be for public consumption. But we now have a Constitution that stipulates power emanates from the people....not oozing from the Executive so.... On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we should move towards the sabstitutes even if it is a monopoly situation. By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.’ After he once advised me to watch ‘Field of Dreams’ I somehow managed to get a few of the team members of the Least Cost Power Development Plan on my side and since then I consider him a very progressive ally. Only last week an aquittance born, bred and from Scandinavia categorically informed me he is relocating permanently to our part of the world after more than 40 years working in the north. His logic is that ‘we (Kenyans) are always fighting over a small cake when all around us there is flour, baking powder, sugar and energy to bake very many small cakes enough for all of us’. That reminded me of ‘Field of Dreams’. Every time you see a small, medium and big building (house) be it in uptown Runda or Mathare/Kibera informal settlement…anywhere dotted along the roads/paths we drive/walk….it is a potential solar centre. Only Ghana, at the close of 2011, in Africa is committed to implementing smart grid technology. This is a no brainer as China, Germany among other already use it. If you have solar on your building during the day it saves you energy (converted to electricity when you need it). Any excess may be offloaded to the grid who when they balance their books either request for extra payment of make you a cheque if you used less than you generated. If you have driven/walked along Parliament road at night the street lights there use solar. Why the City Council of Nairobi, Mombasa Municipal, Kisumu and all those other county councils cannot replicate this is a mystery to me! All schools, health centers, market places etc would also be having the same.Dr. Ndemo is spot on when he says ‘By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.’ as what is lacking in our beloved Kenya is the will. All those power pylons may be made to each house unlike the current situation where Kenyans 'beg' REA and/or KPLC to bring poles to them after paying upfront. We need the implementation of the smart grid technology locally…but remember Ghana is politically more mature than Kenya (they already know who will be the Presidential hopefuls when they hold their elections this year and additionally the two main parties are issue based not individual based) and that contributed to their economic growth being 14% (according to the ruling party but 8% according to the main opposing party). David On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in the Energy Sector to date ( David I hope you do not mind working on an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods as we have stated before.
It is imperative that we realize that if we have to bring energy efficiencies to speed and develop & industrialize this economy, electricity has to lead from the front.
It therefore follows that we must streamline the main players – very critical. We cannot tolerate a situation where investors are in full flight citing the high cost of
electricity to set up industry here at home, while neighboring countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being undertaken in electricity generation so far, as earlier assessed. However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’ to date, we need to resolve this now. Does this interfere in any way with operational/pricing efficiencies filtering to the consumers? There needs to be transparency with a critical national utility Service provider such as this.. So can the right honorable gentlemen please clear the air on this? Grace.., possibly we could request Hon Rege for comment on this or get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can we systematically begin working on breaking up the monopoly setup we currently have in place. What happened to the Energy Act 2006 that was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate. Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable alternative am afraid that by our standards here and now, we can only develop some small scale domestic consumption in the short term. This won’t
really make any much dent in KPLC’s side. Meanwhile, we are discussing driving economy /industrial growth in the mid-term/long term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are actively scaling up efforts to generate more power to fuel our growth, we might just have to content with a bottleneck distribution, and this is currently only done by KPLC and so far, this state of affairs is quite unsatisfactory.
Harry
-----Original Message----- From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke] On Behalf Of David Otwoma Sent: Sunday, January 01, 2012 10:35 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating to
the mandate,
management, activities, administration, operations and estimates of the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the Ministries and
departments as measured by the results obtained as compared with their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual Estimates
shall stand
committed to the respective Departmental Committees according to their
mandates.
(2) Each Departmental Committee shall consider, discuss and review the Estimates
committed to it under this standing order and submit its report thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April, 2010, the
Speaker directed that the Departmental Committee on Energy, Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in the
financial year
2008/9. During the year, the maximum daily electricity peak demand recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen was
formed out of
KPLC. The Policy Paper among others established a single energy regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government should not allow
KPLC to be in the control of business people who are motivated by profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85% redeemable
non-cumulative preference shares (87.12 million shares which Treasury has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares held in the
name of the Permanent Secretary, Treasury and not other state agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999, all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission and
distribution
assets owned by other entities were transferred to KPLC at depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken over and
reflected in the books of REA. Currently such assets are owned by the Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing reasonable
profits. The Committee therefore recommends that the Energy Act be amended and
that ERC puts in place feedback mechanisms to ensure that demand is met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its subsidies for
the transmission and operation costs so that they are not reflected in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest return
(short term of course) is in charcoal burning, followed by burning oil
(again returns occur in less than a Parliamentary term) not putting up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr. Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking investment
in
energy. This is what we are trying to address: The role of government in
enterprise. If you go deeper into Schumpeter's theory, you will find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the
idea
saying there were enough messengers around. With the invention of mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called "creative
destruction".
We must understand this theory if indeed we want to survive in the days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to light up
street lights. This innovation even in Kenya does not require government
approval. Further we have enriched the Arab world far too long when we
use
parrafin to power our rudimentally oil lamps. Instead we should by now
have
provided a simple battery, a solar panel and a micro wind vane to every
household for energy supply. This will save us billions of dollars that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced
economies. Your approach would fail. You must first create the market
through simple understandable solutions. The demands for energy will then
be incremental such that even if you were to build 10,000 MW you have a
ready market.
On colonialism; This is non sense in my view. Those who colonized us are
dead and most of those who were colonized are dead too. We must not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them but they
have not spent their lives grumbling about the past. They have faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be
grateful that the British colonized us. The British were only interested
in
domination and material wealth. The French's integration approach still
has
implications on their colonies. Indeed as I write there are Africans in
Africa who consider themselves French. There are African states that
still
pay French tax. Mineral resources on African continent still belong to
France.
I have nothing against the French. If our Francophone brothers feel
comfortable this way, let it be. The best we can do is to face up to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us. Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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Sorry Harry, Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies. As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP 2013-2033 that will be out early next year. However, this is for electricity sub sector only. David On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National Energy Policy, it looks to me the policy drafting is restricted to the Energy sector technocrats. It doesn't look like we have any broad based representation that cuts across the entire Public sector spectrum, especially when it comes to dealing with such a crucial sector. I thought, this is the spirit and letter under the new constitution..? And is vision 2030 represented to ensure the policy is in tune with the vision - I suppose then we can seek to make input via their delegation on the team.
Any possibility, that you got your hands on the draft document for our review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards, Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Monday, January 02, 2012 10:37 AM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper. However, the Ministry of Energy in conjunction with all players in energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an National Energy Policy. A second draft was produced in December 2011 and will ask tomorrow if its allowed to circulate it and communicate accordingly. A number of my colleagues are on the drafting Committees (there is the Executive composed of PS, MoE; the MDs of ERC, GDC, KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers, engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA etc.). Last timetable I have possession of envisages the National Energy Policy being ready in early 2013. Usually such a Policy would become a Sessional Paper (as the one of 2004 that led to the Energy Act of 2006) once adopted by the Cabinet. Thereafter its recommendations (legislation setting and regulatory matters if enacted by Parliament become law) are the ones which may be for public consumption. But we now have a Constitution that stipulates power emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we should move towards the sabstitutes even if it is a monopoly situation. By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.’ After he once advised me to watch ‘Field of Dreams’ I somehow managed to get a few of the team members of the Least Cost Power Development Plan on my side and since then I consider him a very progressive ally. Only last week an aquittance born, bred and from Scandinavia categorically informed me he is relocating permanently to our part of the world after more than 40 years working in the north. His logic is that ‘we (Kenyans) are always fighting over a small cake when all around us there is flour, baking powder, sugar and energy to bake very many small cakes enough for all of us’. That reminded me of ‘Field of Dreams’. Every time you see a small, medium and big building (house) be it in uptown Runda or Mathare/Kibera informal settlement…anywhere dotted along the roads/paths we drive/walk….it is a potential solar centre. Only Ghana, at the close of 2011, in Africa is committed to implementing smart grid technology. This is a no brainer as China, Germany among other already use it. If you have solar on your building during the day it saves you energy (converted to electricity when you need it). Any excess may be offloaded to the grid who when they balance their books either request for extra payment of make you a cheque if you used less than you generated. If you have driven/walked along Parliament road at night the street lights there use solar. Why the City Council of Nairobi, Mombasa Municipal, Kisumu and all those other county councils cannot replicate this is a mystery to me! All schools, health centers, market places etc would also be having the same.Dr. Ndemo is spot on when he says ‘By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.’ as what is lacking in our beloved Kenya is the will. All those power pylons may be made to each house unlike the current situation where Kenyans 'beg' REA and/or KPLC to bring poles to them after paying upfront. We need the implementation of the smart grid technology locally…but remember Ghana is politically more mature than Kenya (they already know who will be the Presidential hopefuls when they hold their elections this year and additionally the two main parties are issue based not individual based) and that contributed to their economic growth being 14% (according to the ruling party but 8% according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in the Energy Sector to date ( David I hope you do not mind working on an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods as we have stated before.
It is imperative that we realize that if we have to bring energy efficiencies to speed and develop & industrialize this economy, electricity has to lead from the front.
It therefore follows that we must streamline the main players – very critical. We cannot tolerate a situation where investors are in full flight citing the high cost of
electricity to set up industry here at home, while neighboring countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being undertaken in electricity generation so far, as earlier assessed. However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’ to date, we need to resolve this now. Does this interfere in any way with operational/pricing efficiencies filtering to the consumers? There needs to be transparency with a critical national utility Service provider such as this.. So can the right honorable gentlemen please clear the air on this? Grace.., possibly we could request Hon Rege for comment on this or get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can we systematically begin working on breaking up the monopoly setup we currently have in place. What happened to the Energy Act 2006 that was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate. Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable alternative am afraid that by our standards here and now, we can only develop some small scale domestic consumption in the short term. This won’t
really make any much dent in KPLC’s side. Meanwhile, we are discussing driving economy /industrial growth in the mid-term/long term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are actively scaling up efforts to generate more power to fuel our growth, we might just have to content with a bottleneck distribution, and this is currently only done by KPLC and so far, this state of affairs is quite unsatisfactory.
Harry
-----Original Message----- From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke] On Behalf Of David Otwoma Sent: Sunday, January 01, 2012 10:35 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating to
the mandate,
management, activities, administration, operations and estimates of the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the Ministries and
departments as measured by the results obtained as compared with their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual Estimates
shall stand
committed to the respective Departmental Committees according to their
mandates.
(2) Each Departmental Committee shall consider, discuss and review the Estimates
committed to it under this standing order and submit its report thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April, 2010, the
Speaker directed that the Departmental Committee on Energy, Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in the
financial year
2008/9. During the year, the maximum daily electricity peak demand recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen was
formed out of
KPLC. The Policy Paper among others established a single energy regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government should not allow
KPLC to be in the control of business people who are motivated by profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85% redeemable
non-cumulative preference shares (87.12 million shares which Treasury has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares held in the
name of the Permanent Secretary, Treasury and not other state agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999, all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission and
distribution
assets owned by other entities were transferred to KPLC at depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken over and
reflected in the books of REA. Currently such assets are owned by the Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing reasonable
profits. The Committee therefore recommends that the Energy Act be amended and
that ERC puts in place feedback mechanisms to ensure that demand is met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its subsidies for
the transmission and operation costs so that they are not reflected in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest return
(short term of course) is in charcoal burning, followed by burning oil
(again returns occur in less than a Parliamentary term) not putting up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr. Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking investment
in
energy. This is what we are trying to address: The role of government in
enterprise. If you go deeper into Schumpeter's theory, you will find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed the
idea
saying there were enough messengers around. With the invention of mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called "creative
destruction".
We must understand this theory if indeed we want to survive in the days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to light up
street lights. This innovation even in Kenya does not require government
approval. Further we have enriched the Arab world far too long when we
use
parrafin to power our rudimentally oil lamps. Instead we should by now
have
provided a simple battery, a solar panel and a micro wind vane to every
household for energy supply. This will save us billions of dollars that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in advanced
economies. Your approach would fail. You must first create the market
through simple understandable solutions. The demands for energy will then
be incremental such that even if you were to build 10,000 MW you have a
ready market.
On colonialism; This is non sense in my view. Those who colonized us are
dead and most of those who were colonized are dead too. We must not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them but they
have not spent their lives grumbling about the past. They have faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you must be
grateful that the British colonized us. The British were only interested
in
domination and material wealth. The French's integration approach still
has
implications on their colonies. Indeed as I write there are Africans in
Africa who consider themselves French. There are African states that
still
pay French tax. Mineral resources on African continent still belong to
France.
I have nothing against the French. If our Francophone brothers feel
comfortable this way, let it be. The best we can do is to face up to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us. Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
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Many thanks, David... and what a resource...!, Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030. I will revert on key elements, but I noted this part:- 4.3 Future Economic Outlook: The Vision 2030 Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenya’s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment.. · Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable…? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..? · We stepping into an election year, the cycle we’ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..? I believe Mr. Mugo, you can address this…? Harry Harry -----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Sorry Harry, Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies. As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP 2013-2033 that will be out early next year. However, this is for electricity sub sector only. David On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.’ After he once advised me
to watch ‘Field of Dreams’ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that ‘we (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of us’. That reminded me of ‘Field of Dreams’.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlement…anywhere dotted
along the roads/paths we drive/walk….it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says ‘By now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.’ as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locally…but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players – very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
won’t
really make any much dent in KPLC’s side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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regulation. The network aims to act as a catalyst for reform in the
ICT
sector in support of the national aim of ICT enabled growth and
development.
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behaviors
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regulation. The network aims to act as a catalyst for reform in the
ICT
sector in support of the national aim of ICT enabled growth and
development.
KICTANetiquette : Adhere to the same standards of acceptable
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
platform for people and institutions interested and involved in ICT
policy and regulation. The network aims to act as a catalyst for
reform in the ICT sector in support of the national aim of ICT
enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors online that you follow in real life: respect people's times
and bandwidth, share knowledge, don't flame or abuse or personalize,
respect privacy, do not spam, do not market your wares or qualifications.
Harry, I request you to view the film clip in the link below on Ethiopia Commodity Exchange. This will simplfy our vision especially in improvement of the efficiencies in our agricultural sector. http://blog.ted.com/2008/08/12/archive_eleni_g/ Coservative estimates put our agicultural waste at about $5 billion. The lady you see in the film could have chosen any of the variables below: Complain from the diaspora that their government is oppressive; that Ethiopians at home do not know anything; that there is corruption in Ethiopia; that the government is doing nothing to alleviate poverty and so on. She chose to roll her sleeves and show her people what needs to be done. With a few developers, I have asked that we come up with the application on the mobile and also leverage on the digital villages and unlock the Kenyan potential in agriculture. If you are interested, please register with mchege66@gmail.com. We do not need to be in government or senior positions in private sector to change this country for ever. We shall have the first meeting towards the end of January. That is how you can understand what Mugo wants to achieve. Regards Ndemo.
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenyaâs sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable� What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle weâve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address this�
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said â Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.â After he once advised me
to watch âField of Dreamsâ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that âwe (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of usâ. That reminded me of âField of Dreamsâ.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlementâ¦anywhere dotted
along the roads/paths we drive/walkâ¦.it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says âBy now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.â as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locallyâ¦but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players â very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The âgoings-onâ at the Distributor â KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a âmystery shroudâ
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly â We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor �
3. ERC â Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better â especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
wonât
really make any much dent in KPLCâs side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister âthe French have a
system whereby the losing party produces the prime Minister â one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving peopleâs representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ârespectableâ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
⢠Development, production, maintenance and regulation of Energy.
⢠Communication.
⢠Information.
⢠Broadcasting, and
⢠Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is â
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ââ¦KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.â The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
companyâs Board of
Directors. Further, the Companyâs vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was âwholly owned or
controlled by the
government or by a state corporationâ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLCâs pensionâs scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Governmentâs shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at âdepreciated replacement costsâ. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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enabled growth and development.
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As a formerly highly paid executive who left, rolled her sleeves and got to working on turning Ethiopia "into a regional food basket" Eleni Gabre Madhin , goes to proof that we can all get down to the practical rather waiting for things to fall in place and be perfect before we engage. When KICTANet started in 2003, we got together to speed up ICT policy process, to contribute to access related among others. We have made great great strides and gains since then on all fronts. Can 2012 be the year where we get down to the business of being practical? can we now shift gears from discussing lack of services ( I am guilty.... electricity, poor state of our roads) to rolling our sleeves and finding practical solutions? P.S Ndemo's invitation below to "come up with mobile applications and also leverage on the digital villages and unlock the Kenyan potential in agriculture" is timely and hope many listers will attend the meeting and also provide opportunities for more of this level of engagement. We can shift our attitudes, enhance our capacity to innovate (in the private and in the public sector) and increase our ability to adopt and adapt ICTs to local conditions to increase our productivity, efficiency etc, which a precondition for growth and what 2030 vision aims to achieve. Wishing all a very innovative and productive 2012. Best Alice
Harry, I request you to view the film clip in the link below on Ethiopia Commodity Exchange. This will simplfy our vision especially in improvement of the efficiencies in our agricultural sector.
http://blog.ted.com/2008/08/12/archive_eleni_g/
Coservative estimates put our agicultural waste at about $5 billion. The lady you see in the film could have chosen any of the variables below: Complain from the diaspora that their government is oppressive; that Ethiopians at home do not know anything; that there is corruption in Ethiopia; that the government is doing nothing to alleviate poverty and so on.
She chose to roll her sleeves and show her people what needs to be done. With a few developers, I have asked that we come up with the application on the mobile and also leverage on the digital villages and unlock the Kenyan potential in agriculture. If you are interested, please register with mchege66@gmail.com. We do not need to be in government or senior positions in private sector to change this country for ever. We shall have the first meeting towards the end of January. That is how you can understand what Mugo wants to achieve.
Regards
Ndemo.
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of KenyaâEUR^(TM)s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variableâEUR¦? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle weâEUR^(TM)ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address thisâEUR¦?
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano<harry@comtelsys.co.ke> wrote:
Thanks David, Looking at the list of technocrats mentioned working on the National Energy Policy, it looks to me the policy drafting is restricted to the Energy sector technocrats. It doesn't look like we have any broad based representation that cuts across the entire Public sector spectrum, especially when it comes to dealing with such a crucial sector. I thought, this is the spirit and letter under the new constitution..? And is vision 2030 represented to ensure the policy is in tune with the vision - I suppose then we can seek to make input via their delegation on the team. Any possibility, that you got your hands on the draft document for our review...? More later, as we check out the resources you gave out.. Many thanks, once again.. Regards, Harry -----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Monday, January 02, 2012 10:37 AM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Harry, Thank you for your email with suggestion of Energy concept Paper. However, the Ministry of Energy in conjunction with all players in energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an National Energy Policy. A second draft was produced in December 2011 and will ask tomorrow if its allowed to circulate it and communicate accordingly. A number of my colleagues are on the drafting Committees (there is the Executive composed of PS, MoE; the MDs of ERC, GDC, KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers, engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA etc.). Last timetable I have possession of envisages the National Energy Policy being ready in early 2013. Usually such a Policy would become a Sessional Paper (as the one of 2004 that led to the Energy Act of 2006) once adopted by the Cabinet. Thereafter its recommendations (legislation setting and regulatory matters if enacted by Parliament become law) are the ones which may be for public consumption. But we now have a Constitution that stipulates power emanates from the people....not oozing from the Executive so.... On Dr. Ndemo he said âEUR~ Similarly, when the cost of energy goes up, we should move towards the sabstitutes even if it is a monopoly situation. By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.âEUR^(TM) After he once advised me to watch âEUR~Field of DreamsâEUR^(TM) I somehow managed to get a few of the team members of the Least Cost Power Development Plan on my side and since then I consider him a very progressive ally. Only last week an aquittance born, bred and from Scandinavia categorically informed me he is relocating permanently to our part of the world after more than 40 years working in the north. His logic is that âEUR~we (Kenyans) are always fighting over a small cake when all around us there is flour, baking powder, sugar and energy to bake very many small cakes enough for all of usâEUR^(TM). That reminded me of âEUR~Field of DreamsâEUR^(TM). Every time you see a small, medium and big building (house) be it in uptown Runda or Mathare/Kibera informal settlementâEUR¦anywhere dotted along the roads/paths we drive/walkâEUR¦.it is a potential solar centre. Only Ghana, at the close of 2011, in Africa is committed to implementing smart grid technology. This is a no brainer as China, Germany among other already use it. If you have solar on your building during the day it saves you energy (converted to electricity when you need it). Any excess may be offloaded to the grid who when they balance their books either request for extra payment of make you a cheque if you used less than you generated. If you have driven/walked along Parliament road at night the street lights there use solar. Why the City Council of Nairobi, Mombasa Municipal, Kisumu and all those other county councils cannot replicate this is a mystery to me! All schools, health centers, market places etc would also be having the same.Dr. Ndemo is spot on when he says âEUR~By now we should have built solar to such levels that we can force KPLC to be considerate in pricing.âEUR^(TM) as what is lacking in our beloved Kenya is the will. All those power pylons may be made to each house unlike the current situation where Kenyans 'beg' REA and/or KPLC to bring poles to them after paying upfront. We need the implementation of the smart grid technology locallyâEUR¦but remember Ghana is politically more mature than Kenya (they already know who will be the Presidential hopefuls when they hold their elections this year and additionally the two main parties are issue based not individual based) and that contributed to their economic growth being 14% (according to the ruling party but 8% according to the main opposing party). David On 1/2/12, Harry Delano<harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen, David's well articulated summary herein below on the going's on in the Energy Sector to date ( David I hope you do not mind working on an Energy concept Paper as requested by the Vision 2030), quite clearly indicates that we are in the woods as we have stated before. It is imperative that we realize that if we have to bring energy efficiencies to speed and develop& industrialize this economy, electricity has to lead from the front. It therefore follows that we must streamline the main players âEUR" very critical. We cannot tolerate a situation where investors are in full flight citing the high cost of electricity to set up industry here at home, while neighboring countries can easily accommodate their needs. I suppose that we can note with satisfaction the efforts being undertaken in electricity generation so far, as earlier assessed. However we have to address the distribution sector. For me, I would be keen on three areas: 1. The âEUR~goings-onâEUR^(TM) at the Distributor âEUR" KPLC. If whether it is a parastatal, quasi-parastatal or its ownership remains a âEUR~mystery shroudâEUR^(TM) to date, we need to resolve this now. Does this interfere in any way with operational/pricing efficiencies filtering to the consumers? There needs to be transparency with a critical national utility Service provider such as this.. So can the right honorable gentlemen please clear the air on this? Grace.., possibly we could request Hon Rege for comment on this or get on board an active member of the Committee on Energy..? 2. Monopoly âEUR" We still insist - Competition breeds competencies. Can we systematically begin working on breaking up the monopoly setup we currently have in place. What happened to the Energy Act 2006 that was to remove monopoly of Kenya Power as distributor âEUR¦? 3. ERC âEUR" Am still yet to fully comprehend the makeup structure/mandate. Can we make it work better âEUR" especially, on Electricity/Oil..? Bw PS, while we may fully agree that Solar energy is a viable alternative am afraid that by our standards here and now, we can only develop some small scale domestic consumption in the short term. This wonâEUR^(TM)t really make any much dent in KPLCâEUR^(TM)s side. Meanwhile, we are discussing driving economy /industrial growth in the mid-term/long term for Vision 2030. Electricity has to carry out the job and drive this. The general concern we all share right now is that, while we are actively scaling up efforts to generate more power to fuel our growth, we might just have to content with a bottleneck distribution, and this is currently only done by KPLC and so far, this state of affairs is quite unsatisfactory. Harry -----Original Message----- From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke] On Behalf Of David Otwoma Sent: Sunday, January 01, 2012 10:35 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Solomon, Having moved from Science& Technology (under Ministry of Higher Education, Science and Technology) to Nuclear Electricity Project (under Ministry of Energy) there are some perceptions that the PS of Information& Communication have that needs further interrogating. While working outside Kenya (1998 to 2006) I was privileged to visit many countries that operated nuclear power plants for electricity generation and will share experiences from a few. In France the energy giant is called EDF.see http://france.edf.com/france-45634.html It is like combining Kenya Power (distributors), KETRACO (transmitters), KenGen (generators) and a myriad of others e.g. Nuclear Electricity Project, Geothermal Development Co, Rural Electrification, etc. EDF owns power stations (58 nuclear power plants, coal and gas power generators, hydro power stations). EDF also owns the transmission lines (for both high and low voltages) and EDF is also a great marketer (sells electricity to over 30 million customers in France and over 25 million outside France). Yet the government of France owns the lion share in EDF. What we call here Independent Power Producers are insignificant in France. In fact the regulators, who for example control the nuclear power infrastructure (called the French Nuclear Safety Authority see http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2 selected by the President, 1 by the Prime Minister âEUR"the French have a system whereby the losing party produces the prime Minister âEUR" one by the equivalent of COTU, one by the professional in the nuclear industry). This is similar to USA where Nuclear Regulatory Commission also has 5 Commissioners, 3 chosen by the party in power and 2 by the losing party. In both France and USA nuclear is therefore a national matter and is not reduced to part politics. In USA by contrast what we call here IPP reign supreme. In nuclear for example some equivalents of our Tana and Arthi River Develoment Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own both hydro and nuclear power plants. Municipalities too own power companies. So too do equivalents of IPPs here. Different entities also own transmission and distribution lines. What is in USA is more of an exception and not the rule. The rules/laws in USA for example would not tolerate a scenario where a serving peopleâEUR^(TM)s representative (in Senate or Congress) would be a wanted person for deals done when s/he was a Secretary (of State, Energy, Treasury etc.) and a former MD (President in USA energy firm) would be âEUR~respectableâEUR^(TM) public figures after questions bordering on criminality arise. Most of the world (Russia, China, Japan, South Korea, Iran, Egypt, etc.) the government irrespective of the party in power plays a very visible role in energy generation, transmission, distribution and marketing. In Egypt for example electricity is cheaper for manufacturers (hence fruits grown in Egypt by irrigation using electricity to pump water from the nile to orchards are cheaper in Kenya than our own locally produced fruits with rain fed agriculture!) and heavily subsidized for the population so as to ensure 98% electrification (Kenya we are just blow 20% while in Hungary upto year 1999 every human habitation it was the duty of the government to connect it with electricity that costs less than kshs. 40 per month for the dweller then irrespective of consumption). Hansard has a report with the following in it. The Energy Act 2006 removes monopoly of Kenya Power as distributor. The Committee on Energy, Communications and Information was constituted on June 17th 2009 and its membership is as follows:- 1. The Hon. (Eng.) James Rege, M.P. Chairman 2. The Hon. Maina Kamau, M.P Vice Chairman 3. The Hon. Danson Mwazo Mwakulegwa, M.P 4. The Hon. Mohamed Hussein Ali, M.P 5. The Hon. (Eng.) Nicholas Gumbo, M.P 6. The Hon. Edwin O. Yinda, M.P 7. The Hon. Emilio Kathuri, M.P 8. The Hon. Ekwee Ethuro ,M.P 9. The Hon. (Prof.) Phillip Kaloki, M.P 10. The Hon. Cyprian Omolo, M.P The Committee is mandated to consider:- âEUR¢ Development, production, maintenance and regulation of Energy. âEUR¢ Communication. âEUR¢ Information. âEUR¢ Broadcasting, and âEUR¢ Information Communications Technology (ICT) development. The Committee executes its mandate in accordance with the provisions of Standing Order 198 (3), which is âEUR" a) to investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned Ministries and Departments; b) to Study the programme and policy objectives on Ministries and Departments and the effectiveness of the implementation; c) to Study and review all legislation referred to it; d) to study, assess and analyze the relative success of the Ministries and departments as measured by the results obtained as compared with their stated objectives; e) to investigate and enquire into all matters relating to the assigned Ministries and departments as they may deem necessary, and as may be referred to them by the House or a Minister; and f) to make reports and recommendations to the House as often as possible, including recommendation of proposed legislation. Further, Standing Order No. 152 provide that:- (1) Upon being laid before the National Assembly, the Annual Estimates shall stand committed to the respective Departmental Committees according to their mandates. (2) Each Departmental Committee shall consider, discuss and review the Estimates committed to it under this standing order and submit its report thereon to the House within twenty one days after they were first laid before the House. Ministries assigned In executing its oversight mandate the Committee oversees the following Ministries:- i) Ministry of Energy ii) Ministry of Information and Communications. On Wednesday14th April, 2010 during the Afternoon Sitting, the Member of Parliament for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of Energy the following Question by Private Notice. a. What is the relationship between Kenya Power and Lighting Company (KPLC) and Rural Electrification Authority (REA)? b. How much money has the Ministry paid to KPLC through REA since its inception to date? c. Could the Minister provide details of the amount paid as dividends to the major shareholders of KPLC since its privatization? In addition to this Question, the Member for Yatta, Hon. Charles Kilonzo had on Tuesday 16th March, 2010 asked a Question on overcharging of electricity consumers by KPLC. The two questions elicited a lot of interest from Members who sought to know whether KPLC is a parastatal or a private company, its shareholders, whether it receives funding or financial support from the Government, its working relationship with REA, the amount of dividends it had paid to its shareholders over time and other issues surrounding its ownership and management. As a result, on 14th April, 2010, the Speaker directed that the Departmental Committee on Energy, Communication and Information should take up this matter and file a report in the House. KPLC is a public company that was incorporated in 1922 as a private company and was later listed in the NSE in 1954. On diverse dates between 1960 and 1975, the government bought KPLC shares totaling to 32,853,268 which represents 40.4% of the voting shares of the Company. It is responsible for transmission, distribution and retail supply of electrical energy to end users. It purchases power in bulk from KenGen and the IPPs through bilateral contracts or Power Purchase Agreements (PPAs) approved by ERC. KPLC is responsible for ensuring that there is adequate line capacity to maintain supply and quality of electricity across the country. The interconnected network of transmission and distribution lines covers about 41,486 kilometers. It has more than 1,500,000 customers who consumed over 5,432 Gigawatt hours of electricity in the financial year 2008/9. During the year, the maximum daily electricity peak demand recorded was 1,072 MW. The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely liberalized the energy sector in the country which was started in 1997 when KenGen was formed out of KPLC. The Policy Paper among others established a single energy regulator and unbundled KPLC to form KETRACO, REA and GDC. KPLC is the only licensed supplier, distributor and retailer of electrical energy in Kenya KPLC is a single buyer for all the power generated in Kenya and injected into the interconnected grid for sale to the consumers. The trading arrangements between KPLC and each of the generators are governed by a long-term Power Purchase Agreement (PPA) approved by ERC. Such PPAs comprise capacity charge, energy charge, fuel pass through and inflation indexed clauses. The retail tariff structure comprises of a fixed charge, energy charge and capacity charge. On Wednesday 14th April, 2010, while answering a Question by Private Notice by Hon. B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was not clear on whether KPLC is a parastatal or not. At one point he informed the House that KPLC was a private company with the Government as one of the shareholders. At another point, he informed the House that âEUR~âEUR¦KPLC is a Government parastatal, but a different parastatal from other parastatals. It is in a different category with other parastatals. There are parastatals which are not listed at the NSE. So this is different to that extent.âEUR^(TM) The Government needs to be clear on whether KPLC is a Government Parastatal or a private company. The Committee notes the importance of KPLC to service delivery in the country and that the achievement of Vision 2030 depends on the success of the electricity sector. It is evident that the Government largely supports KPLC through guaranteed loans and profit plough-backs and also appoints a majority of directors to the companyâEUR^(TM)s Board of Directors. Further, the CompanyâEUR^(TM)s vehicles have blue registration number plates, a preserve of parastatals contributing to the uncertainty as to whether KPLC is a parastatal or a private company. Due to the importance of the electricity sector in the country and the regular support offered to KPLC, the Government should not allow KPLC to be in the control of business people who are motivated by profits at the expense of the citizens. KPLC could be termed a State Corporation if it was âEUR~wholly owned or controlled by the government or by a state corporationâEUR^(TM) in accordance with the definition proffered in the State Corporations Act. Following the disposal of shares by NSSF, the Company does not meet the requirements stipulated for it to qualify as a state corporation. Furthermore, KPLC has not submitted fully to the provisions of the Public Audit Act, by having its accounts audited by the Controller and Auditor General and submitted to the National Assembly for examination by the Public Investments Committee (PIC). he Controller and Auditor General last submitted audited accounts for KPLC for the year 2001/2002. PIC queried the non submission of KPLC accounts for the subsequent years in its 12th Report of 2004. Thereafter, accounts for the financial year 2007/2008 were tabled in December 2009. That notwithstanding, in 2004 PIC examined the following non accounting issues:- i) KPLCâEUR^(TM)s pensionâEUR^(TM)s scheme, ii) Contracts between KPLC and IPPs, iii) The general financial status of the company and iv) Supply of treated poles during the Financial year 2004/2005 (13th Report). The Committee therefore recommends that:- i) The Government proceeds with the conversion of some of its 7.85% redeemable non-cumulative preference shares (87.12 million shares which Treasury has approved) into ordinary shares at a ratio of 1:1 and retains the ordinary shares so as to raise its stake in KPLC to 75% thus qualifying the company as a parastatal. The GovernmentâEUR^(TM)s shareholding in KPLC be determined by the shares held in the name of the Permanent Secretary, Treasury and not other state agencies who might later on dispose their shares without approval from the Treasury. Before unbundling of electricity generation from transmission and distribution in the 1990s, there were 5 major players in the power sector, namely Kenya Power Company (KPC), Tana River Development Company (TRDC), Tana and Athi Rivers Development Authority (TARDA), Kerio Valley Development Authority (KVDA) and KPLC. The initial unbundling comprised first merging TRDC and KPC in 1996 to KPC which changed its name to KenGen in 1998. The second step comprised consolidating all the power generation assets, owned by the five (5) parastatals under KenGen and the transmission and distribution assets under KPLC. By October 1999, all power generation assets from KPLC, TRDC, KPC, TARDA and KVDA were transferred to KenGen at âEUR~depreciated replacement costsâEUR^(TM). Similarly, transmission and distribution assets owned by other entities were transferred to KPLC at depreciated replacement costs. The Committee recommends that, like the previous unbundling:- i) All assets under the REP since 1973 should be tracked and taken over and reflected in the books of REA. Currently such assets are owned by the Government but under KPLC. ii) All transmission assets should be tracked and taken over and reflected in the books of KETRACO. Currently such assets acquired before the formation of KETRACO in 2008, are owned by KPLC while KETRACO will own new assets that it will develop. KPLC should surrender all transmission assets to KETRACO. iii) All assets under geothermal exploration and extraction held by KenGen (including Olkaria I& II) should be taken over by GDC to avoid the Government competing with itself. The Committee notes that ERC has failed to deliver on its mandate especially with regards to protecting energy consumers. This is reflected in the high costs of electricity in Kenya as compared to its neighbours which is a key factor in driving investors out of the country. Further, the high electricity costs cause most Kenyans to resort to traditional sources of energy such as charcoal and firewood, further depleting our environment. While unbundling the electricity sub-sector, the Government intended to make the electricity clean, quality and affordable which is evidently not the case. The Committee also notes with concern that under the Energy Act, ERC is expected to ensure that the industry players such as KenGen remain profitable and viable which impacts negatively on the consumers despite the PPAs guaranteeing reasonable profits. The Committee therefore recommends that the Energy Act be amended and that ERC puts in place feedback mechanisms to ensure that demand is met with reliable, cost effective and high quality energy services in an environmentally friendly manner. The Committee further recommends that the Government increase its subsidies for the transmission and operation costs so that they are not reflected in the tariffs and the consumer bills. The Committee notes that the public is misinformed on the operations of the various players in the power sector and recommends that the Government carry out public education to inform the public on the various initiatives and power players which will promote transparency in the energy sector. Further, the price variations reflected on the consumer bills should be demystified to the public. In conclusion what PS, Ministry of Information and Communications raises i.e. inviting Hon Rege who is Chairman of Energy and Information& Communication to shed light on how the Committees recommendations have been taken up by the relevant institutions. In conclusion and as noted in some earlier debate, energy is an enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At the national level, wood fuel and other biomass account for about 68% of the total primary energy consumption followed by petroleum at 22%, electricity at 9% and others including coal at about less than 1%. This is not sustainable as electricity providing less than 10% of energy yet we plan to industrialize! The October 2011 National Energy Conference revealed that even the 20+% oli bill almost 10% goes to burn in diesel generators to produce the expensive fuel levy reflected in electricity bills. While making Dr. Ndemo play Presidential aspirant it was concluded that while electricity has the least Cost Power Development Plan team doing 20 year rolling plans no such activity is in the oil sector! Is that by design or its a long term oversight? Wood (read biomass) never got any country on earth industrialized and hence government cannot (should not) wait for Independent Power Producers to invest in energy, as the easiest return (short term of course) is in charcoal burning, followed by burning oil (again returns occur in less than a Parliamentary term) not putting up a nuclear power plant. Best wishes for 2012 to all. David On 12/31/11, Solomon MbÅ©rÅ© Kamau<solo.mburu@gmail.com> wrote:
Dr. Ndemo, With due respect, I find your comment on listers' popints to Mr. Mugo not satisfying (to your expectations). However, in the foregoing, I understand that most of us were not privy to the conception of the Vision 2030, and perhaps, we were raisin issues per what we see happening, for example on energy. Kenya Power as a monopoly enjoys 100% benefit in the power sector, yet in the ccompetitive and liberalized world, competition thrives when the market is not capped on one firm. Kenya Power, while being good in blackouts, stills enjoys support from the government, yet as we speak about achieving the Vision, energy is the most important aspect driving us towards the realization of the flashship projects pointed out. Generally, without education, there is nothing like achieving development in it's full scale. In my view, I think the contributors interrogating Mr. Mugo did their level best to make the Vision clear in a layman language, more sepcifically, Mr. Mugo himself. Regards, Solomon On 31/12/2011, bitange@jambo.co.ke<bitange@jambo.co.ke> wrote:
Eric, I am not done with your questions yet. On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come. When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction". We must understand this theory if indeed we want to survive in the days to come. In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care. Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail. You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market. On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing. Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French. There are African states that still pay French tax. Mineral resources on African continent still belong to France. I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda. Regards. Ndemo. Sent from my BlackBerry® -----Original Message----- From: "Eric M.K Osiakwan"<emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To:<bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/bitange%40jamb o.co.ke The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications. _______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/solo.mburu%40g mail.com The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development. KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
Thank you Bw Ps, for this. It's priceless, and this really should be a challenge to each one of us, and yes we are prepared to roll our sleeves - up. We look forward to engage in the Agriculture sector. Meanwhile, let's not tire to ensure that the fundamentals that create such an enabling environment for innovation and enterprise to thrive are, and remain in place in every corner of this republic. Many thanks. Harry -----Original Message----- From: bitange@jambo.co.ke [mailto:bitange@jambo.co.ke] Sent: Thursday, January 05, 2012 3:10 PM To: harry@comtelsys.co.ke Cc: bitange@jambo.co.ke; 'KICTAnet ICT Policy Discussions' Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Harry, I request you to view the film clip in the link below on Ethiopia Commodity Exchange. This will simplfy our vision especially in improvement of the efficiencies in our agricultural sector. http://blog.ted.com/2008/08/12/archive_eleni_g/ Coservative estimates put our agicultural waste at about $5 billion. The lady you see in the film could have chosen any of the variables below: Complain from the diaspora that their government is oppressive; that Ethiopians at home do not know anything; that there is corruption in Ethiopia; that the government is doing nothing to alleviate poverty and so on. She chose to roll her sleeves and show her people what needs to be done. With a few developers, I have asked that we come up with the application on the mobile and also leverage on the digital villages and unlock the Kenyan potential in agriculture. If you are interested, please register with mchege66@gmail.com. We do not need to be in government or senior positions in private sector to change this country for ever. We shall have the first meeting towards the end of January. That is how you can understand what Mugo wants to achieve. Regards Ndemo.
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenya’s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable…? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle we’ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address this…?
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.’ After he once advised me
to watch ‘Field of Dreams’ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that ‘we (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of us’. That reminded me of ‘Field of Dreams’.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlement…anywhere dotted
along the roads/paths we drive/walk….it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says ‘By now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.’ as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locally…but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players – very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
won’t
really make any much dent in KPLC’s side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
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I also agree on what the previous contributors have pointed out. Let us make 2012 a year of practically doing things. For a long time, everyone has complained; this is not working, that is impractical, nothing can take us out of the quagmire, blah, blah, blah! It is time to make things move than wait for them to move themselves. Regards, Solomon On 06/01/2012, Harry Delano <harry@comtelsys.co.ke> wrote:
Thank you Bw Ps, for this. It's priceless, and this really should be a challenge to each one of us, and yes we are prepared to roll our sleeves - up. We look forward to engage in the Agriculture sector.
Meanwhile, let's not tire to ensure that the fundamentals that create such an enabling environment for innovation and enterprise to thrive are, and remain in place in every corner of this republic.
Many thanks.
Harry
-----Original Message----- From: bitange@jambo.co.ke [mailto:bitange@jambo.co.ke] Sent: Thursday, January 05, 2012 3:10 PM To: harry@comtelsys.co.ke Cc: bitange@jambo.co.ke; 'KICTAnet ICT Policy Discussions' Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Harry, I request you to view the film clip in the link below on Ethiopia Commodity Exchange. This will simplfy our vision especially in improvement of the efficiencies in our agricultural sector.
http://blog.ted.com/2008/08/12/archive_eleni_g/
Coservative estimates put our agicultural waste at about $5 billion. The lady you see in the film could have chosen any of the variables below: Complain from the diaspora that their government is oppressive; that Ethiopians at home do not know anything; that there is corruption in Ethiopia; that the government is doing nothing to alleviate poverty and so on.
She chose to roll her sleeves and show her people what needs to be done. With a few developers, I have asked that we come up with the application on the mobile and also leverage on the digital villages and unlock the Kenyan potential in agriculture. If you are interested, please register with mchege66@gmail.com. We do not need to be in government or senior positions in private sector to change this country for ever. We shall have the first meeting towards the end of January. That is how you can understand what Mugo wants to achieve.
Regards
Ndemo.
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenya’s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable…? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle we’ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address this…?
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.’ After he once advised me
to watch ‘Field of Dreams’ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that ‘we (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of us’. That reminded me of ‘Field of Dreams’.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlement…anywhere dotted
along the roads/paths we drive/walk….it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says ‘By now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.’ as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locally…but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players – very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
won’t
really make any much dent in KPLC’s side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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Dear Harry, I’m informed that an advert shall be put up early next week, Mon or Tue referring all interested parties to the Energy Regulations Commission website for access to the document. It will however be important to share the document as extensively as possible after that so that we can have as much input as possible, thanks for starting that off. David On 1/4/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenya’s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable…? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle we’ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address this…?
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.’ After he once advised me
to watch ‘Field of Dreams’ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that ‘we (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of us’. That reminded me of ‘Field of Dreams’.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlement…anywhere dotted
along the roads/paths we drive/walk….it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says ‘By now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.’ as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locally…but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players – very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
won’t
really make any much dent in KPLC’s side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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regulation. The network aims to act as a catalyst for reform in the
ICT
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development.
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behaviors
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regulation. The network aims to act as a catalyst for reform in the
ICT
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development.
KICTANetiquette : Adhere to the same standards of acceptable
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
platform for people and institutions interested and involved in ICT
policy and regulation. The network aims to act as a catalyst for
reform in the ICT sector in support of the national aim of ICT
enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors online that you follow in real life: respect people's times
and bandwidth, share knowledge, don't flame or abuse or personalize,
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Hey David, Thanks once again for the follow up. It's quite refreshing going through the earlier Energy policy draft you provided that it unequivocally provides for and incorporates the very basic tenets of Vision 2030. We will be keenly looking forward towards the main actors playing their critical role within this vision.. Harry -----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Thursday, January 12, 2012 1:40 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3) Dear Harry, I’m informed that an advert shall be put up early next week, Mon or Tue referring all interested parties to the Energy Regulations Commission website for access to the document. It will however be important to share the document as extensively as possible after that so that we can have as much input as possible, thanks for starting that off. David On 1/4/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenya’s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable…? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle we’ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address this…?
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.’ After he once advised me
to watch ‘Field of Dreams’ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that ‘we (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of us’. That reminded me of ‘Field of Dreams’.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlement…anywhere dotted
along the roads/paths we drive/walk….it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says ‘By now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.’ as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locally…but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players – very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
won’t
really make any much dent in KPLC’s side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
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people and institutions interested and involved in ICT policy and
regulation. The network aims to act as a catalyst for reform in the
ICT
sector in support of the national aim of ICT enabled growth and
development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors
online that you follow in real life: respect people's times and
bandwidth,
share knowledge, don't flame or abuse or personalize, respect
privacy, do
not spam, do not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
platform for
people and institutions interested and involved in ICT policy and
regulation. The network aims to act as a catalyst for reform in the
ICT
sector in support of the national aim of ICT enabled growth and
development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors
online that you follow in real life: respect people's times and
bandwidth,
share knowledge, don't flame or abuse or personalize, respect
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
platform for people and institutions interested and involved in ICT
policy and regulation. The network aims to act as a catalyst for
reform in the ICT sector in support of the national aim of ICT
enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors online that you follow in real life: respect people's times
and bandwidth, share knowledge, don't flame or abuse or personalize,
respect privacy, do not spam, do not market your wares or qualifications.
Dear Harry, I’m informed that an advert shall be put up early next week, Monday 16th January or Tuesday 17th January 2012 referring all interested parties to the Energy Regulations Commission website for access to the document. It will however be important to share the document as extensively as possible after that so that we can have as much input as possible. Thanks for starting the discussion of energy and in particular electricity off. David On 1/4/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Many thanks, David... and what a resource...!,
Ladies and gentlemen, for those who have a keen interest in matters pertaining energy, here is a huge resource we can interrogate. Especially, where it has a direct bearing as a driver for ICT growth and by extension to the Vision 2030.
I will revert on key elements, but I noted this part:-
4.3 Future Economic Outlook: The Vision 2030
Until 2007, the Economic Recovery Strategy for wealth and employment creation (ERS) established the foundation upon which to build a prosperous Kenya and a robust economic growth. Following ERS, the Government launched the Vision 2030 for outlining the broader macro-economic objectives and strategy of the country up to the year 2030. The Vision 2030 was further elaborated in the Medium Term Plan 2008-2012 (MTP) which aims at consolidating the gains of the ERS. This is based on the implementation of a low and stable inflation and interest rates, sustainable public debt, competitive environment and refurbishing of infrastructures. The Vision 2030 describes the way Kenya will be transformed from a low income agrarian economy into a newly industrialized middle income country, providing a high quality of life to all its citizens. This goal is based on three pillars, namely political stability, social development and economic growth. The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015. For achieving this target six key sectors of production have been identified: tourism, agriculture, manufacturing, wholesale and retail trade, business processes out outsourcing (BPO) and financial services. The Vision 2030 identifies energy and electricity as a key element of Kenya’s sustained economic growth and transformation.
From the statement of intent above we can interrogate 3 Key things in relation with Vision2030:-
· The economic objectives supporting the Vision 2030 require an annual GDP growth of at a least 10%, to be reached by the year 2015.- Clearly, gains made are being speedily reversed in this area, looking at the current inflation and interest rates that have shot up. Again the Medium Term Plan, highlights these 2 as key areas, including improving the business environment, and infrastructure refurbishment..
· Based on their analysis, the demand in the Energy sector especially Electricity seems to draw a parallel to the shifting shadows in GDP. Is this the only variable…? What about the pricing model, that might also be driving away demand in form of investors choosing to invest elsewhere ..?
· We stepping into an election year, the cycle we’ve witnessed in the past dictates a meltdown in gains made run-up to the election year, then we again start from scratch. How do we make a clean break with the past, consolidate gains especially for the MTP, and ensure we remain on track, come elections or not..?
I believe Mr. Mugo, you can address this…?
Harry
Harry
-----Original Message----- From: David Otwoma [mailto:otwomad@gmail.com] Sent: Wednesday, January 04, 2012 3:20 PM To: harry@comtelsys.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
Sorry Harry,
Have been able to obtain the2nd draft but it is the 3rd draft National Energy Policy document that will be availed for public comments/feedback from 3rd to 11th February 2011. The venue of its first release (3rd February) is the School of Monetary Studies.
As consolation attached please find the Least Cost Power Development Plan 2011-2031. Comments are welcome to feed into the next LCPDP
2013-2033 that will be out early next year. However, this is for electricity sub sector only.
David
On 1/3/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Thanks David,
Looking at the list of technocrats mentioned working on the National
Energy Policy, it looks to me the policy drafting is restricted to the
Energy sector technocrats. It doesn't look like we have any broad
based representation that cuts across the entire Public sector
spectrum, especially when it comes to dealing with such a crucial
sector. I thought, this is the spirit and letter under the new
constitution..? And is vision 2030 represented to ensure the policy is
in tune with the vision - I suppose then we can seek to make input via
their delegation on the team.
Any possibility, that you got your hands on the draft document for our
review...?
More later, as we check out the resources you gave out..
Many thanks, once again..
Regards,
Harry
-----Original Message-----
From: David Otwoma [mailto:otwomad@gmail.com]
Sent: Monday, January 02, 2012 10:37 AM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day 3)
Harry,
Thank you for your email with suggestion of Energy concept Paper.
However, the Ministry of Energy in conjunction with all players in
energy (ERC, GDC, KPLC, KenGen, NEPC, REA etc.) are working on an
National Energy Policy. A second draft was produced in December 2011
and will ask tomorrow if its allowed to circulate it and communicate
accordingly. A number of my colleagues are on the drafting Committees
(there is the Executive composed of PS, MoE; the MDs of ERC, GDC,
KPLC, KenGen, NEPC, REA etc.), (then technocrats composed of lawyers,
engineers, economists etc in MoE, ERC, GDC, KPLC, KenGen, NEPC, REA
etc.). Last timetable I have possession of envisages the National
Energy Policy being ready in early 2013. Usually such a Policy would
become a Sessional Paper (as the one of 2004 that led to the Energy
Act of 2006) once adopted by the Cabinet. Thereafter its
recommendations (legislation setting and regulatory matters if enacted
by Parliament become law) are the ones which may be for public
consumption. But we now have a Constitution that stipulates power
emanates from the people....not oozing from the Executive so....
On Dr. Ndemo he said ‘ Similarly, when the cost of energy goes up, we
should move towards the sabstitutes even if it is a monopoly
situation. By now we should have built solar to such levels that we
can force KPLC to be considerate in pricing.’ After he once advised me
to watch ‘Field of Dreams’ I somehow managed to get a few of the team
members of the Least Cost Power Development Plan on my side and since
then I consider him a very progressive ally. Only last week an
aquittance born, bred and from Scandinavia categorically informed me
he is relocating permanently to our part of the world after more than
40 years working in the north. His logic is that ‘we (Kenyans) are
always fighting over a small cake when all around us there is flour,
baking powder, sugar and energy to bake very many small cakes enough
for all of us’. That reminded me of ‘Field of Dreams’.
Every time you see a small, medium and big building (house) be it in
uptown Runda or Mathare/Kibera informal settlement…anywhere dotted
along the roads/paths we drive/walk….it is a potential solar centre.
Only Ghana, at the close of 2011, in Africa is committed to
implementing smart grid technology. This is a no brainer as China,
Germany among other already use it. If you have solar on your building
during the day it saves you energy (converted to electricity when you
need it). Any excess may be offloaded to the grid who when they
balance their books either request for extra payment of make you a
cheque if you used less than you generated. If you have driven/walked
along Parliament road at night the street lights there use solar. Why
the City Council of Nairobi, Mombasa Municipal, Kisumu and all those
other county councils cannot replicate this is a mystery to me! All
schools, health centers, market places etc would also be having the
same.Dr. Ndemo is spot on when he says ‘By now we should have built
solar to such levels that we can force KPLC to be considerate in
pricing.’ as what is lacking in our beloved Kenya is the will. All
those power pylons may be made to each house unlike the current
situation where Kenyans 'beg' REA and/or KPLC to bring poles to them
after paying upfront. We need the implementation of the smart grid
technology locally…but remember Ghana is politically more mature than
Kenya (they already know who will be the Presidential hopefuls when
they hold their elections this year and additionally the two main
parties are issue based not individual based) and that contributed to
their economic growth being 14% (according to the ruling party but 8%
according to the main opposing party).
David
On 1/2/12, Harry Delano <harry@comtelsys.co.ke> wrote:
Ladies and Gentlemen,
David's well articulated summary herein below on the going's on in
the Energy Sector to date ( David I hope you do not mind working on
an Energy concept Paper as requested
by the Vision 2030), quite clearly indicates that we are in the woods
as we have stated before.
It is imperative that we realize that if we have to bring energy
efficiencies to speed and develop & industrialize this economy,
electricity has to lead from the front.
It therefore follows that we must streamline the main players – very
critical. We cannot tolerate a situation where investors are in full
flight citing the high cost of
electricity to set up industry here at home, while neighboring
countries can easily accommodate their needs.
I suppose that we can note with satisfaction the efforts being
undertaken in electricity generation so far, as earlier assessed.
However we have to address the
distribution sector.
For me, I would be keen on three areas:
1. The ‘goings-on’ at the Distributor – KPLC. If whether it is a
parastatal, quasi-parastatal or its ownership remains a ‘mystery shroud’
to
date, we need to resolve this now. Does this interfere in any way
with operational/pricing efficiencies filtering to the consumers?
There needs to be transparency with a critical national utility
Service provider such as this.. So can the right honorable gentlemen
please clear the air on this?
Grace.., possibly we could request Hon Rege for comment on this or
get on board an active member of the Committee on Energy..?
2. Monopoly – We still insist - Competition breeds competencies. Can
we
systematically begin working on breaking up the monopoly setup we
currently have in place. What happened to the Energy Act 2006 that
was to remove monopoly of Kenya Power as distributor …?
3. ERC – Am still yet to fully comprehend the makeup structure/mandate.
Can we make it work better – especially, on Electricity/Oil..?
Bw PS, while we may fully agree that Solar energy is a viable
alternative am afraid that by our standards here and now, we can only
develop some small scale domestic consumption in the short term. This
won’t
really make any much dent in KPLC’s side. Meanwhile, we are
discussing driving economy /industrial growth in the mid-term/long
term for Vision 2030. Electricity has to carry out the job and drive this.
The general concern we all share right now is that, while we are
actively scaling up efforts to generate more power to fuel our
growth, we might just have to content with a bottleneck distribution,
and this is currently only done by KPLC and so far, this state of
affairs is quite unsatisfactory.
Harry
-----Original Message-----
From: kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke@lists.kictanet.or.ke]
On Behalf Of David Otwoma
Sent: Sunday, January 01, 2012 10:35 PM
To: harry@comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
Solomon,
Having moved from Science & Technology (under Ministry of Higher
Education, Science and Technology) to Nuclear Electricity Project
(under Ministry of Energy) there are some perceptions that the PS of
Information & Communication have that needs further interrogating.
While working outside Kenya (1998 to 2006) I was privileged to visit
many countries that operated nuclear power plants for electricity
generation and will share experiences from a few.
In France the energy giant is called EDF.see
http://france.edf.com/france-45634.html It is like combining Kenya
Power (distributors), KETRACO (transmitters), KenGen (generators) and
a myriad of others e.g. Nuclear Electricity Project, Geothermal
Development Co, Rural Electrification, etc. EDF owns power stations
(58 nuclear power plants, coal and gas power generators, hydro power
stations). EDF also owns the transmission lines (for both high and
low
voltages) and EDF is also a great marketer (sells electricity to over
30 million customers in France and over 25 million outside France).
Yet the government of France owns the lion share in EDF. What we call
here Independent Power Producers are insignificant in France. In fact
the regulators, who for example control the nuclear power
infrastructure (called the French Nuclear Safety Authority see
http://www.french-nuclear-safety.fr/ ) has only 5 Commissioners (2
selected by the President, 1 by the Prime Minister –the French have a
system whereby the losing party produces the prime Minister – one by
the equivalent of COTU, one by the professional in the nuclear
industry). This is similar to USA where Nuclear Regulatory Commission
also has 5 Commissioners, 3 chosen by the party in power and 2 by the
losing party. In both France and USA nuclear is therefore a national
matter and is not reduced to part politics.
In USA by contrast what we call here IPP reign supreme. In nuclear
for
example some equivalents of our Tana and Arthi River Develoment
Authority, Kerio Valley Authority I;e; Tennesse Valley Authority own
both hydro and nuclear power plants. Municipalities too own power
companies. So too do equivalents of IPPs here. Different entities
also
own transmission and distribution lines.
What is in USA is more of an exception and not the rule. The
rules/laws in USA for example would not tolerate a scenario where a
serving people’s representative (in Senate or Congress) would be a
wanted person for deals done when s/he was a Secretary (of State,
Energy, Treasury etc.) and a former MD (President in USA energy firm)
would be ‘respectable’ public figures after questions bordering on
criminality arise. Most of the world (Russia, China, Japan, South
Korea, Iran, Egypt, etc.) the government irrespective of the party in
power plays a very visible role in energy generation, transmission,
distribution and marketing. In Egypt for example electricity is
cheaper for manufacturers (hence fruits grown in Egypt by irrigation
using electricity to pump water from the nile to orchards are cheaper
in Kenya than our own locally produced fruits with rain fed
agriculture!) and heavily subsidized for the population so as to
ensure 98% electrification (Kenya we are just blow 20% while in
Hungary upto year 1999 every human habitation it was the duty of the
government to connect it with electricity that costs less than kshs.
40 per month for the dweller then irrespective of consumption).
Hansard has a report with the following in it.
The Energy Act 2006 removes monopoly of Kenya Power as distributor.
The Committee on Energy, Communications and Information was
constituted on June 17th 2009 and its membership is as follows:-
1. The Hon. (Eng.) James Rege, M.P. Chairman
2. The Hon. Maina Kamau, M.P Vice Chairman
3. The Hon. Danson Mwazo Mwakulegwa, M.P
4. The Hon. Mohamed Hussein Ali, M.P
5. The Hon. (Eng.) Nicholas Gumbo, M.P
6. The Hon. Edwin O. Yinda, M.P
7. The Hon. Emilio Kathuri, M.P
8. The Hon. Ekwee Ethuro ,M.P
9. The Hon. (Prof.) Phillip Kaloki, M.P
10. The Hon. Cyprian Omolo, M.P
The Committee is mandated to consider:-
• Development, production, maintenance and regulation of Energy.
• Communication.
• Information.
• Broadcasting, and
• Information Communications Technology (ICT) development.
The Committee executes its mandate in accordance with the provisions
of Standing
Order 198 (3), which is –
a) to investigate, inquire into, and report on all matters relating
to
the mandate,
management, activities, administration, operations and estimates of
the assigned
Ministries and Departments;
b) to Study the programme and policy objectives on Ministries and
Departments and
the effectiveness of the implementation;
c) to Study and review all legislation referred to it;
d) to study, assess and analyze the relative success of the
Ministries and
departments as measured by the results obtained as compared with
their stated
objectives;
e) to investigate and enquire into all matters relating to the
assigned Ministries and
departments as they may deem necessary, and as may be referred to
them by the
House or a Minister; and
f) to make reports and recommendations to the House as often as
possible,
including recommendation of proposed legislation.
Further, Standing Order No. 152 provide that:-
(1) Upon being laid before the National Assembly, the Annual
Estimates
shall stand
committed to the respective Departmental Committees according to
their
mandates.
(2) Each Departmental Committee shall consider, discuss and review
the Estimates
committed to it under this standing order and submit its report
thereon to the
House within twenty one days after they were first laid before the House.
Ministries assigned
In executing its oversight mandate the Committee oversees the
following Ministries:-
i) Ministry of Energy
ii) Ministry of Information and Communications.
On Wednesday14th April, 2010 during the Afternoon Sitting, the Member
of Parliament
for Mumias Constituency, Hon. Benjamin Washiali asked the Ministry of
Energy the
following Question by Private Notice.
a. What is the relationship between Kenya Power and Lighting Company
(KPLC) and Rural Electrification Authority (REA)?
b. How much money has the Ministry paid to KPLC through REA since its
inception to date?
c. Could the Minister provide details of the amount paid as dividends
to the
major shareholders of KPLC since its privatization?
In addition to this Question, the Member for Yatta, Hon. Charles
Kilonzo had on
Tuesday 16th March, 2010 asked a Question on overcharging of
electricity consumers
by KPLC.
The two questions elicited a lot of interest from Members who sought
to know whether
KPLC is a parastatal or a private company, its shareholders, whether
it receives
funding or financial support from the Government, its working
relationship with REA,
the amount of dividends it had paid to its shareholders over time and
other issues
surrounding its ownership and management. As a result, on 14th April,
2010, the
Speaker directed that the Departmental Committee on Energy,
Communication and
Information should take up this matter and file a report in the House.
KPLC is a public company that was incorporated in 1922 as a private
company and was
later listed in the NSE in 1954. On diverse dates between 1960 and
1975, the
government bought KPLC shares totaling to 32,853,268 which represents
40.4% of the
voting shares of the Company. It is responsible for transmission,
distribution and retail
supply of electrical energy to end users. It purchases power in bulk
from KenGen and
the IPPs through bilateral contracts or Power Purchase Agreements
(PPAs) approved
by ERC.
KPLC is responsible for ensuring that there is adequate line capacity
to maintain supply
and quality of electricity across the country. The interconnected
network of transmission
and distribution lines covers about 41,486 kilometers. It has more
than 1,500,000
customers who consumed over 5,432 Gigawatt hours of electricity in
the
financial year
2008/9. During the year, the maximum daily electricity peak demand
recorded was
1,072 MW.
The Energy Act and the Sessional Paper No. 4 of 2004 on Energy widely
liberalized the
energy sector in the country which was started in 1997 when KenGen
was
formed out of
KPLC. The Policy Paper among others established a single energy
regulator and
unbundled KPLC to form KETRACO, REA and GDC.
KPLC is the only licensed supplier, distributor and retailer of
electrical energy in Kenya
KPLC is a single buyer for all the power generated in Kenya and
injected into the interconnected grid for sale to the consumers. The
trading arrangements between KPLC and each of the generators are
governed by a long-term Power Purchase Agreement (PPA) approved by
ERC. Such PPAs comprise capacity charge, energy charge, fuel pass
through and inflation indexed clauses. The retail tariff structure
comprises of a fixed charge, energy charge and capacity charge.
On Wednesday 14th April, 2010, while answering a Question by Private
Notice by Hon.
B. Washiali, the Assistant Minister for Energy, Hon. M.M. Mohamud was
not clear on
whether KPLC is a parastatal or not. At one point he informed the
House that KPLC was
a private company with the Government as one of the shareholders. At
another point,
he informed the House that ‘…KPLC is a Government parastatal, but a
different
parastatal from other parastatals. It is in a different category with
other parastatals. There are parastatals which are not listed at the
NSE. So this is different to that extent.’ The Government needs to be
clear on whether KPLC is a Government Parastatal or a private company.
The Committee notes the importance of KPLC to service delivery in the
country and that
the achievement of Vision 2030 depends on the success of the
electricity sector. It is
evident that the Government largely supports KPLC through guaranteed
loans and profit
plough-backs and also appoints a majority of directors to the
company’s Board of
Directors. Further, the Company’s vehicles have blue registration
number plates, a
preserve of parastatals contributing to the uncertainty as to whether
KPLC is a
parastatal or a private company. Due to the importance of the
electricity sector in the
country and the regular support offered to KPLC, the Government
should not allow
KPLC to be in the control of business people who are motivated by
profits at the
expense of the citizens.
KPLC could be termed a State Corporation if it was ‘wholly owned or
controlled by the
government or by a state corporation’ in accordance with the
definition proffered in the
State Corporations Act. Following the disposal of shares by NSSF, the
Company does
not meet the requirements stipulated for it to qualify as a state
corporation. Furthermore,
KPLC has not submitted fully to the provisions of the Public Audit
Act, by having its
accounts audited by the Controller and Auditor General and submitted
to the National
Assembly for examination by the Public Investments Committee (PIC).
he Controller and Auditor General last submitted audited accounts for
KPLC for the
year 2001/2002. PIC queried the non submission of KPLC accounts for
the subsequent
years in its 12th Report of 2004. Thereafter, accounts for the
financial year 2007/2008
were tabled in December 2009. That notwithstanding, in 2004 PIC
examined the
following non accounting issues:-
i) KPLC’s pension’s scheme,
ii) Contracts between KPLC and IPPs,
iii) The general financial status of the company and
iv) Supply of treated poles during the Financial year 2004/2005 (13th
Report).
The Committee therefore recommends that:-
i) The Government proceeds with the conversion of some of its 7.85%
redeemable
non-cumulative preference shares (87.12 million shares which Treasury
has
approved) into ordinary shares at a ratio of 1:1 and retains the
ordinary shares so
as to raise its stake in KPLC to 75% thus qualifying the company as a
parastatal.
The Government’s shareholding in KPLC be determined by the shares
held in the
name of the Permanent Secretary, Treasury and not other state
agencies who
might later on dispose their shares without approval from the Treasury.
Before unbundling of electricity generation from transmission and
distribution in the
1990s, there were 5 major players in the power sector, namely Kenya
Power Company
(KPC), Tana River Development Company (TRDC), Tana and Athi Rivers
Development Authority (TARDA), Kerio Valley Development Authority
(KVDA) and
KPLC. The initial unbundling comprised first merging TRDC and KPC in
1996 to KPC
which changed its name to KenGen in 1998. The second step comprised
consolidating
all the power generation assets, owned by the five (5) parastatals
under KenGen and
the transmission and distribution assets under KPLC. By October 1999,
all power
generation assets from KPLC, TRDC, KPC, TARDA and KVDA were
transferred to
KenGen at ‘depreciated replacement costs’. Similarly, transmission
and
distribution
assets owned by other entities were transferred to KPLC at
depreciated
replacement
costs.
The Committee recommends that, like the previous unbundling:-
i) All assets under the REP since 1973 should be tracked and taken
over and
reflected in the books of REA. Currently such assets are owned by the
Government
but under KPLC.
ii) All transmission assets should be tracked and taken over and
reflected in the books
of KETRACO. Currently such assets acquired before the formation of
KETRACO in
2008, are owned by KPLC while KETRACO will own new assets that it
will develop.
KPLC should surrender all transmission assets to KETRACO.
iii) All assets under geothermal exploration and extraction held by
KenGen (including
Olkaria I & II) should be taken over by GDC to avoid the Government
competing
with itself.
The Committee notes that ERC has failed to deliver on its mandate
especially with
regards to protecting energy consumers. This is reflected in the high
costs of electricity
in Kenya as compared to its neighbours which is a key factor in
driving investors out of
the country. Further, the high electricity costs cause most Kenyans
to resort to
traditional sources of energy such as charcoal and firewood, further
depleting our
environment. While unbundling the electricity sub-sector, the
Government intended to
make the electricity clean, quality and affordable which is evidently
not the case.
The Committee also notes with concern that under the Energy Act, ERC
is expected to
ensure that the industry players such as KenGen remain profitable and
viable which
impacts negatively on the consumers despite the PPAs guaranteeing
reasonable
profits. The Committee therefore recommends that the Energy Act be
amended and
that ERC puts in place feedback mechanisms to ensure that demand is
met with
reliable, cost effective and high quality energy services in an
environmentally friendly
manner.
The Committee further recommends that the Government increase its
subsidies for
the transmission and operation costs so that they are not reflected
in
the tariffs and the
consumer bills.
The Committee notes that the public is misinformed on the operations
of the various
players in the power sector and recommends that the Government carry
out public
education to inform the public on the various initiatives and power
players which will
promote transparency in the energy sector. Further, the price
variations reflected on
the consumer bills should be demystified to the public.
In conclusion what PS, Ministry of Information and Communications
raises i.e. inviting Hon Rege who is Chairman of Energy and
Information & Communication to shed light on how the Committees
recommendations have been taken up by the relevant institutions.
In conclusion and as noted in some earlier debate, energy is an
enabler and the current situation is not sustainable i.e. 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 including rural communities and urban poor. At
the national level, wood fuel and other biomass account for about 68%
of the total primary energy consumption followed by petroleum at 22%,
electricity at 9% and others including coal at about less than 1%.
This is not sustainable as electricity providing less than 10% of
energy yet we plan to industrialize! The October 2011 National Energy
Conference revealed that even the 20+% oli bill almost 10% goes to
burn in diesel generators to produce the expensive fuel levy
reflected
in electricity bills. While making Dr. Ndemo play Presidential
aspirant it was concluded that while electricity has the least Cost
Power Development Plan team doing 20 year rolling plans no such
activity is in the oil sector! Is that by design or its a long term
oversight? Wood (read biomass) never got any country on earth
industrialized and hence government cannot (should not) wait for
Independent Power Producers to invest in energy, as the easiest
return
(short term of course) is in charcoal burning, followed by burning
oil
(again returns occur in less than a Parliamentary term) not putting
up
a nuclear power plant.
Best wishes for 2012 to all.
David
On 12/31/11, Solomon Mbũrũ Kamau <solo.mburu@gmail.com> wrote:
Dr. Ndemo,
With due respect, I find your comment on listers' popints to Mr.
Mugo
not satisfying (to your expectations). However, in the foregoing, I
understand that most of us were not privy to the conception of the
Vision 2030, and perhaps, we were raisin issues per what we see
happening, for example on energy. Kenya Power as a monopoly enjoys
100% benefit in the power sector, yet in the ccompetitive and
liberalized world, competition thrives when the market is not capped
on one firm. Kenya Power, while being good in blackouts, stills
enjoys
support from the government, yet as we speak about achieving the
Vision, energy is the most important aspect driving us towards the
realization of the flashship projects pointed out.
Generally, without education, there is nothing like achieving
development in it's full scale.
In my view, I think the contributors interrogating Mr. Mugo did
their
level best to make the Vision clear in a layman language, more
sepcifically, Mr. Mugo himself.
Regards,
Solomon
On 31/12/2011, bitange@jambo.co.ke <bitange@jambo.co.ke> wrote:
Eric,
I am not done with your questions yet. On Government blocking
investment
in
energy. This is what we are trying to address: The role of
government in
enterprise. If you go deeper into Schumpeter's theory, you will
find that
no government can block an idea or innovation whose time has come.
When Graham Bell invented the telephone, the British Post dismissed
the
idea
saying there were enough messengers around. With the invention of
mobile
telephony, the land line is undergoing the same fate it brought to
communication early in the 20th century. This is what is called
"creative
destruction".
We must understand this theory if indeed we want to survive in the
days to
come. In my recent visit to China, I saw what the future would be like.
A
city the size of Nairobi is using both solar and wind energy to
light up
street lights. This innovation even in Kenya does not require
government
approval. Further we have enriched the Arab world far too long
when we
use
parrafin to power our rudimentally oil lamps. Instead we should by
now
have
provided a simple battery, a solar panel and a micro wind vane to
every
household for energy supply. This will save us billions of dollars
that
we
can invest in preventive medical care.
Your problem is that you want to replicate what you have seen in
advanced
economies. Your approach would fail. You must first create the
market
through simple understandable solutions. The demands for energy
will then
be incremental such that even if you were to build 10,000 MW you
have a
ready market.
On colonialism; This is non sense in my view. Those who colonized
us are
dead and most of those who were colonized are dead too. We must
not
forget
that this happened but our focus should be to build confidence in
ourselves
to face the world. Take China for example, Japan dominated them
but they
have not spent their lives grumbling about the past. They have
faced up
to
Japan and today they compete on an equal footing.
Although parts of Africa are still under the French colony, you
must be
grateful that the British colonized us. The British were only
interested
in
domination and material wealth. The French's integration approach
still
has
implications on their colonies. Indeed as I write there are
Africans in
Africa who consider themselves French. There are African states
that
still
pay French tax. Mineral resources on African continent still
belong to
France.
I have nothing against the French. If our Francophone brothers
feel
comfortable this way, let it be. The best we can do is to face up
to our
colonial power, leverage on the Common Wealth
Association to build a new alliance that benefits all of us.
Together we
have more voting power and ability to lead the agenda.
Regards.
Ndemo.
Sent from my BlackBerry®
-----Original Message-----
From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh>
Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate:
Fri,
30 Dec 2011 15:51:57
To: <bitange@jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke>
Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged
(Day
3)
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
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people and institutions interested and involved in ICT policy and
regulation. The network aims to act as a catalyst for reform in the
ICT
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development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
platform for
people and institutions interested and involved in ICT policy and
regulation. The network aims to act as a catalyst for reform in the
ICT
sector in support of the national aim of ICT enabled growth and
development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors
online that you follow in real life: respect people's times and
bandwidth,
share knowledge, don't flame or abuse or personalize, respect
privacy, do
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder
platform for people and institutions interested and involved in ICT
policy and regulation. The network aims to act as a catalyst for
reform in the ICT sector in support of the national aim of ICT
enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors online that you follow in real life: respect people's times
and bandwidth, share knowledge, don't flame or abuse or personalize,
respect privacy, do not spam, do not market your wares or qualifications.
Sent from my iPhone On Dec 31, 2011, at 8:03, bitange@jambo.co.ke wrote:
Eric, I am not done with your questions yet. Aha....
On Government blocking investment in energy. This is what we are trying to address: The role of government in enterprise. If you go deeper into Schumpeter's theory, you will find that no government can block an idea or innovation whose time has come. Agreed but why should government which should be facilitating assume the posture of the blockage? Is like saying since this would happen even without me complying so I won't comply which means though it happen, it may take longer or may not happen well. Schumpeter's theorem had some assumptions and one of them is not to be a blockage...if the Kenyan government and or some folks at the Central Bank had said mpesa would be great anyway so I would be a blockage, I doubt that we would be seeing the 2% GDP contribution now.
When Graham Bell invented the telephone, the British Post dismissed the idea saying there were enough messengers around. With the invention of mobile telephony, the land line is undergoing the same fate it brought to communication early in the 20th century. This is what is called "creative destruction".
The internet is the most destructive technology ever invented but the Chinese have and continue to minimize it's full manifestation in China.....
We must understand this theory if indeed we want to survive in the days to come.
Am afraid that is more a problem on the side of governments and the recent legislative fracas in the US congress and senate is a new testament...
In my recent visit to China, I saw what the future would be like. A city the size of Nairobi is using both solar and wind energy to light up street lights. This innovation even in Kenya does not require government approval. This is one of the reasons mpesa got roots and I commend the Kenyan government for that foresight and fortitude but some jurisdictions are still lacking behind. Mubarak shut down the Internet in Egypt and before long, he is being tried in a cage....
Further we have enriched the Arab world far too long when we use parrafin to power our rudimentally oil lamps. Instead we should by now have provided a simple battery, a solar panel and a micro wind vane to every household for energy supply. This will save us billions of dollars that we can invest in preventive medical care. Am totally with you but again governments have a role to play in creating the enabling environment for such great ideas, otherwise either they die suffocating or not see the light of day.
Your problem is that you want to replicate what you have seen in advanced economies. Your approach would fail.
To the contrary actually, my argument is we need to create our own solutions but if there is a global solution then we must be mindful of context when adapting or customizing. If you look at my carrier path, it is very clear where I stand....
You must first create the market through simple understandable solutions. The demands for energy will then be incremental such that even if you were to build 10,000 MW you have a ready market. I have being a grass-roots, self organsing and bootstrapping technology entrepreneur but I seldom balance that with some top down elements, again as a way to keep balance...
On colonialism; This is non sense in my view. Those who colonized us are dead and most of those who were colonized are dead too. We must not forget that this happened but our focus should be to build confidence in ourselves to face the world. Take China for example, Japan dominated them but they have not spent their lives grumbling about the past. They have faced up to Japan and today they compete on an equal footing.
That is the reason I lean more towards George's rendition of the solution than Ali so yes we are on the same page.
Although parts of Africa are still under the French colony, you must be grateful that the British colonized us. The British were only interested in domination and material wealth. The French's integration approach still has implications on their colonies. Indeed as I write there are Africans in Africa who consider themselves French.
Yes, as an English African I have a lot of francophone friends who really love me but even the fact that I can't speak French infuriates them. It takes ten timed the effort to get stuff done with and in the francophone regions so yes some heavylifting needs to be done there.
There are African states that still pay French tax. Mineral resources on African continent still belong to France And on and on and on..... .
I have nothing against the French. If our Francophone brothers feel comfortable this way, let it be. I have some ideas around this but I won't postulate them since they are not tested or even proven....
The best we can do is to face up to our colonial power, leverage on the Common Wealth Association to build a new alliance that benefits all of us. Together we have more voting power and ability to lead the agenda. I totally agree so let's do that in the new year...
Regards.
Ndemo.
Eric here
Sent from my BlackBerry®
-----Original Message----- From: "Eric M.K Osiakwan" <emko@internetresearch.com.gh> Sender: kictanet-bounces+bitange=jambo.co.ke@lists.kictanet.or.keDate: Fri, 30 Dec 2011 15:51:57 To: <bitange@jambo.co.ke> Cc: KICTAnet ICT Policy Discussions<kictanet@lists.kictanet.or.ke> Subject: [kictanet] Vision 2030: ICT and Other Sectors Converged (Day 3)
_______________________________________________ kictanet mailing list kictanet@lists.kictanet.or.ke http://lists.kictanet.or.ke/mailman/listinfo/kictanet
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
participants (10)
-
Agosta Liko -
Alice Munyua -
bitange＠jambo.co.ke -
David Otwoma -
Edith Adera -
Emmanuel K. Nzai -
Eric M.K Osiakwan -
Harry Delano -
S.M. Muraya -
Solomon Mbũrũ Kamau