A vicious boardroom war is simmering at Geothermal Development Company (GDC) following sharp differences between the agency’s management and the new chairman Simon Gicharu. The GDC’s boardroom insiders say the differences are linked to the company’s handling of project loans and procurement tenders that Mr Gicharu insists are suspect. Internal communication memo seen by the Business Daily shows that Mr Gicharu and the GDC managing director Silas Simiyu have differed over a number of issues at the parastatal created as a special purpose vehicle to fast track the development of geothermal power sources. A damning report produced ahead of a botched full board meeting that was scheduled for March 6 shows that Mr Gicharu had ordered for an audit of the GDC’s procurement deals as well as a review of ongoing drilling programmes in Nakuru’s Menengai area. Mr Gicharu accuses the GDC management of securing project loans without the board’s approval. “I am concerned because the board has not been involved in policy management of GDC and that all these projects GDC has been undertaking are planned and executed solely by the CEO,” he says, adding that GDC has so far signed big loans with development partners without the knowledge of the board, the Treasury and the Attorney-General. Mr Gicharu also accuses the GDC management of inflating the amount of power it has struck in Menengai area. He claims that an independent audit by an Italian firm, ELC Electroconsult has revealed that the GDC has so far only struck 21MW of power at the Menengai site contrary to claims by its management that it has realised 70MW. “The amount of steam that the independent feasibility study commissioned by GDC established fundamentally differs with the amount of steam that the chief executive has stated and therefore the company is not giving the government of Kenya and development partners value for the money they have invested in the venture. “Worst of all, by contracting generators to invest in power plants for 20 years knowing very well that GDC cannot produce 90MW of power, the government is staring at expensive and avoidable legal suits,” Mr Gicharu says in the letter that recommends suspension of the CEO to allow for investigations. A source at the GDC said the chairman had escalated his demand for accountability in a memo dated March 5 in which he informed board members of the cancellation of the Thursday meeting. In his memo, Mr Gicharu said he had decided to call off the meeting to allow for a formal handover by his predecessor Paul Gondi and get a full briefing from the various departmental committee chairmen on the company’s operations. READ: Geothermal power investors get AU backing for exploration costs Dr Simiyu, however, denied the allegations, insisting that the GDC’s financial dealings and operations were “above board”. “All loans targeted at financing GDC programmes are handled by the Treasury which has a representative on the GDC board. So claims that the CEO is unilaterally negotiating and securing loans on behalf GDC are fictitious,” he said. That z chairman bnard oe trusteer nd owner of MKU
Posted on: Mon, 10 Mar 2014 17:55:54 +0000
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