No insurance cover for 122 Kenya Power substations

No insurance cover for 122 Kenya Power substations

Kenya Power #ticker:KPLC has no insurance cover for its 122 substations distributed across the country, exposing the strategic national assets, employees and the general public to major risks in case of accidents.

The National Assembly’s Energy committee heard that the electricity distributor has been operating without insurance cover since August 31, 2021.

The Kenya Power lacks insurance cover in the event of fire that results in loss of property, damage to substations and injury or death of staff and members of the public.

Gordon Kihalangwa, the Energy principal secretary, said Kenya Power and Lighting Company (KPLC) could not award the tender for procurement of insurance cover for “Fire and Perils (Consequential Loss), Fire and Perils (Sub Stations) and Public /Products Liability (with Consequential Loss Rider)” due to lack of budget.

He said attempts by the Kenya Power to award the tender for the three policies through a restricted tender failed after bidders quoted above available budget and therefore could not be awarded pending availability of funds.

Mr Kihalangwa said KPLC had a budget of Sh700 million for insurance cover in the current financial year.

He said Sh500 million had had been committed for insurance premiums of 27 policies which have since been extended and six policies that have been awarded.

He said Sh416 million had been set aside for the remaining three fire-related insurance cover but winning bidders overshot the budget by Sh300 million.

“The bid prices overshot the available budget allocation. KPLC is in negotiations with the bidders with a view to obtaining optimum premiums within budget,” Mr Kihalangwa said.

He said KPLC is also assessing options on alternative funding to bring the affected policies to the insurance portfolio.

Mr Kihalangwa said the issue will be concluded by December 15, 2021.He was responding to a question filed by nominated MP Godfrey Otsotsi who demanded to know why KPLC has not awarded and finalised the tender even after completion of evaluation and issuance of notification letters to successful bidders.Mr Otsotsi said the country’s strategic energy installations are at great risk in the absence of an insurance cover.Kenya Power procured its insurance on September 1, 2019 which expired on August 31, 2021. The electricity distributor advertised the tender for pre-qualification of insurance brokerage firms on July 20 and was scheduled to close on August12.Mr Kihalangwa said a court order stopped the process leading to suspension of the procurement.“Following the suspension of the tender, KPLC extended 27 insurance policies at existing […]

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