Kenya

Mystery of Devki paying less for power bills than rivals

Mystery of Devki paying less for power bills than rivals

Billionaire Narendra Raval’s Devki Group of Companies stands out as one of the leading electricity consumers in the country.

In his speed dial is who is who in Kenya.

With his mabati, steel-making and cement plants, Mr Devki’s monthly electricity bill runs into hundreds of millions of shillings.

But insiders at Kenya Power have long suspected that the tycoon does not pay what he consumes compared to other customers.

Electricity theft

The story of Mr Devki being involved in electricity theft also reached his ears.

A few months ago, the billionaire wrote to Kenya Power seeking to know the source of the “rumours”.

In its response, Kenya Power told the tycoon that it was carrying out routine checks for revenue assurance.

By then, Kenya Power had also started data logging for the Devki plants as it was suspected that they were underpaying.

Later, he was given a clean bill of health, which led to many questions: Is Devki underpaying or are other Kenya Power customers getting a raw deal?

The investigations began as the utility firm came under scrutiny after a national uproar over high bills and as its profits nosedived.

The suspicion was that big consumers were the culprits.

Records indicate that when the parastatal did a cement company power bill analysis, for instance, it found that Devki’s National Cement, with a clinker capacity of 2.4 million tonnes a year, was paying Sh40 million per month for its electricity consumption compared to Bamburi Cement which has a capacity of 1.2 million tonnes but pays Sh140 million.

East African Portland Cement, which has a clinker capacity of 700,000 tonnes, pays Sh40.8 million per month.

According to the tabulations, Devki’s National Cement – the largest factory in Kenya – should have been paying Sh278 million every month but had for the last three years been paying an average of Sh66 million.

It has remained a mystery why payments from the largest cement making factory in Kenya is equal to those of East African Portland, one of the smallest.

It means either Kenya Power has been overcharging East African Portland or National Cement is paying less than it is expected.

Kenya Power sent its officials to inspect the load profiles of Devki’s five accounts in May.

In their report, the officers absolved the company from any wrongdoing.

“During the inspections, no electricity theft was established. Logged currents correspond with what was recorded by the meter. However, we note the drastic rise in consumption,” the report said.

The Kenya power officials said there was a change in the load profile for the Nakuru account “from little or no consumption at night – but now with consumption at night”.

It was during the inspection that Mr Devki wrote to Kenya Power on the rumours of his factories stealing electricity.

Mr Devki was in the news recently when he said Kenya Power demanded Sh2.8 billion in respect for power supply to his plant in Emali.

He claimed that as a result, Kenya Power had to forgo a monthly bill of Sh400 million.

After that allegation, Kenya Power General Manager, Aggrey Machasio, wrote to Acting MD and Chief Executive, Rosemary Oduor, saying National Cement applied for a 750KVA load in 2012 and was given a quotation of Sh4.7 million, which it paid and was connected.

In 2014, it requested an upgrade to 13.3 MVA and was given a quotation of Sh656 million because “it involved construction of 40 kilometres of 132 KV line and a metering sub-station.

The company did not pay for the quotation and requested another quote for a revision to 6.1 MVA in October 2014, which it did not pay.

When Kenya Power commissioned a sub-station in Sultan Hamud in 2017, Devki applied for an increased load of 10 MVA and was given a quotation of Sh123.8 million which would have involved the construction of a 38 kilometre 33kv line and a metering sub-station.

Mr Devki was given a rebate of 30 per cent and the figure was revised to Sh86 million on October 6, 2020.

However, the company did not honour the new quotation and sought the intervention of the Ministry of Energy, seeking more discount.

“It was upon this request that we sought to allocate funds to an earlier proposed reinforcement scheme which could hitherto not be executed due to funding. The cost of reinforcement was Sh110 million and the same budget is under consideration,” the letter to the CEO says.

“It was upon the proposed reinforcement scheme that a final revised quote was raised on April 23, 2021 for Sh31.6 million. The revised quote is yet to be honoured by the customer,” Kenya Power said while denying that it demanded Sh2.8 billion from Devki Group.

The Devki case is a sneak preview of the power-play in the industry and how big consumers deal with the monopoly.

But whether Devki Group underpays for electricity consumption or its equivalents are overcharged is a matter that only Kenya Power barons and those at the Ministry of Energy can answer.

At the Devki Steel Mill in Ruiru, Kiambu county, the billing indicates that between July and September, the company has paid an average of Sh70 million per month compared to a monthly average of Sh43 million in the previous three months.

While that surge is not explained, it also coincides with the time the government started investigating billing at the parastatal.

A similar rise in billing is recorded at the Devki Steel Mill in Athi River, Machakos county, which has paid an average of Sh56 million per month between June and September, compared to Sh12 million per month between February and May.

For the Kwale plant, the billing has climbed from a low of Sh1.5 million in May to a high of Sh3.1 million in June.

While these many variations have not been explained in the Kenya Power reports – they may be a pointer of the billing chaos at the State-owned monopoly.

 @johnkamau1