Households are the biggest culprits in Kenya Power’s financial headache, accounting for over 60 per cent of dues owed to the utility.
Kenya Power said the unpaid bills range between six months to two years, highlighting tough times for families struggling to keep afloat amid the ravages of the new coronavirus.
The state monopoly announced plans last week to retain the services of four private debt collection agencies for four regions in the latest efforts to recover billions of shillings and improve its cash position.
It’s the second time in less than two years that Kenya Power is seeking debt collectors to recover dues, which in August 2020 were estimated at Sh5 billion.
“Of this debt, over 60 per cent is domiciled with domestic customers,” Kenya Power said.
Kenya Power said contracts for the four debt collectors will last for two years as the utility steps up efforts to recover unpaid dues and cut its losses.
Recover dues
The new debt collectors will be an addition to four others hired last year to recover dues from households and businesses in four regions including Nairobi and the Coast.
The utility says efforts by its staff to recover the debt have failed, hence the move to hire private firms.
The huge chunk of debt among households comes at a time power bills have been on the rise due to the rising cost of petroleum in the global market.
During Kenya Power’s annual general meeting this year, the chairperson, Ms Vivienne Yeda, said sealing loopholes that cause financial haemorrhage and improving revenue collection top the utility’s list.
The owed money has piled pressure on Kenya Power, which has been struggling with honouring debt repayments, especially those with one-year maturity, forcing it to open talks with lenders to convert short-term commercial facilities into medium-term debts.
By June 30, 2020, Kenya Power’s debts stood at Sh119.22 billion, made up of Sh65.96 billion commercial debt and Sh53.26 billion on-lent debt.
Expanded grid
The utility has struggled to cut its debt, reduce operating costs and restore its working capital into a positive position even as the expanded grid poses an oversight nightmare.
It incurred a Sh939 million net loss in the year ending June 2020, the first such loss since 2003 when the utility made a Sh2.89 billion loss 18 years ago. BY DAILY NATION