African Press International (API)

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Kenya, Sad for the consumer: Uhuru rejects Bill seeking refund for power outages.

Posted by African Press International on October 7, 2016

JOHN NGIRACHU -1 | Thursday, October 6, 2016. Nation news Kenya

President Uhuru Kenyatta has rejected a Bill seeking to have Kenya Power compensate customers for blackouts lasting more than three hours.

In a memorandum explaining his refusal to assent to the Energy Bill, President Kenyatta said the clause on compensation for outages “fails to take into account that losses, injuries and damages could result not only on account of power outages, but other factors such as poor quality infrastructure or inputs or irregular supply.

“In addition, such damage can also affect persons, who are not consumers. Further to this, the provision does not take into account that the contracts between licencees and consumers cover such issues,” said President Kenyatta.

Instead, the President recommended a clause that makes this compensation subject to an agreement between Kenya Power and a consumer.

This means that the power distributor would have to put in a clause on compensation in contracts with consumers.

President Kenyatta has also asked Parliament to reduce the percentage of oil revenues local communities would get under a proposed new law on the exploration of petroleum.

He wants the revenue due to the local communities reduced from the 10 per cent of what the national government gets as set by Parliament to five per cent.

This amount should not exceed a quarter of the amount allocated to the county government by Parliament, President Kenyatta said in his memorandum to Parliament on the Petroleum (Exploration, Development and Production) Bill.

The recommendations deal a blow to the efforts made by MPs from Turkana County when the Bill was being processed.

He maintained that the percentage of the national government’s revenues due to the county government in which oil is found is 20 per cent, but also recommended the introduction of a caveat.

The revenue due to a county in which oil is found will not be more than twice the amount it has been allocated by Parliament in a financial year.

“Unless the shares of the petroleum revenues reserved to county governments are capped, the implementation of the (percentages set by Parliament) shall pose the challenge of the inequitable distribution of resources and the risk that county governments and local communities shall receive disproportionately higher allocations which might be beyond their absorption capacities,” said President Kenyatta in the memorandum.

The memorandum was submitted to lawmakers after the President rejected the Petroleum (Exploration, Development and Production) Bill.

It will now be scrutinised by the Energy Committee in the National Assembly and its counterpart committee in the Senate before consideration by both Houses.

In both the Senate and the National Assembly, MPs opposed to the memorandum would have to get a two-thirds majority to overturn.

This has not happened before in the Eleventh Parliament, meaning the chances of the President’s recommended changes becoming law are high.

The Head of State, however, sought to strengthen Parliament’s power over the agreements and contracts signed on the exploration of oil and how it is shared once production starts.

Lawmakers had proposed that the Cabinet Secretary submit to Parliament production sharing contracts for ratification in accordance with Article 71 of the Constitution.

But President Kenyatta said it would also be important for the field development plan to be also submitted to Parliament for scrutiny.

“For this reason, both the production sharing contract and the field development plan should be submitted to Parliament for ratification rather than the production sharing agreement alone,” said President Kenyatta.

He prescribed that the field development plan and the production sharing contract be submitted to Parliament for ratification within 30 days of its approval by both parties.

Parliament would then be required to make its decision within 90 days, without which it would be considered to have been ratified.

African Press International, (API)

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