Kenya’s Cabinet Secretary for Energy and Petroleum Opiyo Wandanyi has stated that Kenya Pipeline Company is not part of government entities that have been earmarked for disposal.
This comes as the government continues with its privatisation agenda targeted mainly at loss-making entities and those with duplicating roles, to tame wastage.
The move that will see up to 200 state enterprises reorganised, with some having private shareholders on boarded, gained momentum after President William Ruto signed into law the Privatisation Bill 2023, in October last year, after it was passed by the National Assembly in September.
Eleven key state corporations, which include the Kenyatta International Convention Centre (KICC), Kenya Literature Bureau (KLB), National Oil Corporation of Kenya (NOCK) and Kenya Pipeline Company (KPC), were on the cards as of this year.
Others are Kenya Seed Company Limited (KSC), Mwea Rice Mills Ltd. (MRM), Western Kenya Rice Mills Limited, New Kenya Cooperative Creameries Limited, Numeric Machining Complex Limited (NMC), Vehicle Manufacturers Limited (KVM) and Rivatex East Africa Limited.
CS Wandayi on Wednesday however struck off KPC, which falls under his ministry from the list, dimming hopes of the private sector, which had started angling to grab a pie in the refined petroleum products handling company, which serves the Kenyan market and the region.
“The matter of restructuring public operations is in the domain of the public service (Public Service Commission) but having said that, I must emphasise and actually clarify that KPC is not on the table in terms of any plans for privatisation,” the Star quoted CS in a report.
Wandayi termed Kenya Pipeline as a strategic institution with “serious national security implications.”
KPC is wholly owned by the government with 99.9 per cent shareholding by the National Treasury and less than 0.1 per cent by the Ministry of Energy and Petroleum.
“It is an institution that the government will have to hold on to for the foreseeable future for its strategic positioning,” said Wandayi.
Cabinet has so far considered and approved the proposed selling off subsidiary business interests of the state’s shareholding in six listed companies.
The companies include East African Portland Cement Limited (25.3 per cent), Nairobi Securities Exchange (3.36 per cent), Housing Finance Company of Kenya Limited (2.41 per cent), Stanbic Holdings-formerly CfC Stanbic Bank Limited (1.1 per cent), Liberty Kenya Holdings-formerly CfC Insurance Holdings (0.9 per cent) and Eveready East Africa PLC (17.2 per cent).
In November last year, Ruto announced that the government was poised to privatise 35 state companies.
There will also be a major restructuring in agencies that have “serious governance issues” and supplication.
Some of the ministries with a high number of state agencies include agriculture, roads, transport and infrastructure, tourism, energy and petroleum, trade and industrialisation and sports, culture and heritage, which could face a major rationalisation.
A huge number of these entities have remained in losses or yielded low dividends for the government, forcing the exchequer to bail them out.
Kenya Pipeline Company is among few entities that pay dividends to the government, alongside the likes of Safaricom, KCB and KenGen, which have private shareholding.
In March this year, it announced an interim dividend payment of Sh5 billion to the National Treasury for the financial year ended June 2023.
The dividend payment followed a 21 per cent increment in KPC’s profitability to Sh7.6 billion in the financial year 2022-2023, compared to Sh6.3 billion the previous year.
Management and the board have since committed to deliver not less than Sh12.5 billion in the current financial year.
Source: https://energynewsafrica.com