Kenya shelves plan for cheap gas to rural homes over safety concerns

Kenya has temporarily shelved its plan to provide cheap cooking gas to millions of poor households after the pre-qualified supplier delivered unsafe 6kg cylinders.

In its grand Project Mwananchi, the government was to buy five million gas cylinders by the end of 2019, fill them with gas and distribute them to the low and middle-income households at a reduced cost of Ksh2,000 ($20). The fee covers cylinder, burner, grill and gas.

The programme, launched in October 2016, was meant to subsidise the cost of cooking fuel for the poor especially in the rural areas in the next three years, and contain the destruction of forests through reduction or elimination of the use of harmful sources of energy such as charcoal, firewood and kerosene.

But the plan seems to falter, with the Ministry of Energy and Petroleum confirming that a consortium led by Allied East Africa Ltd (AEAL), a Kenyan firm contracted to supply the government with the initial 300,000 Gas Yetu cylinders, provided defective appliances that are risky to the consumers.

Order to repair faults

The Principal Secretary in the State Department of Petroleum Andrew Kamau said that the firm has been directed to collect the gas cylinders from the National Oil Corporation of Kenya (NOCK) depot in Nairobi’s Industrial Area, and take them back for repairs. But he was evasive on whether the government will continue doing business with the firm.

“They will take the cylinders back for repairs. They are doing it pole pole (slowly by slowly). You know one truck can carry only about 500 cylinders. It is a pity because these are local manufacturers. We were trying to help,” said Mr Kamau.

The EastAfrican has learnt that the government suspended further distribution of the subsidised cooking gas in January this year over safety concerns.

The official launch of the cheaper gas programme covering poor households in all the 47 counties in Kenya was due to take off after the completion of the pilot programme in Machakos and Kajiado counties last year. However, just 39,000 cylinders met the safety standards and were dispatched to the two counties.

According to NOCK, the state-agency mandated to receive, test, store and distribute the cylinders filled with gas, the affected cylinders had leakages, slow filling rates and defective valves.

“I condemned them and inspectors from the ministry also condemned them. A leaking cylinder is a very serious issue so we halted the process,” said NOCK’s LPG plant manager, Dominic Pere.

Ali Mohamed, a director at the Allied East Africa Ltd in-charge of finance and marketing who spoke to The EastAfrican on the phone acknowledged that indeed some of the cylinders the firm supplied failed to meet the safety and quality standards but denied that the government had cancelled its supply contract.

“When you are given a contract to supply hundreds of thousands of cylinders there is a probability that some will be defective. It is true that some were defective, but that the government has cancelled our contract is not true,” said Mr Mohamed.

An independent investigation by The EastAfrican revealed that out of the 300,000 cylinder supply contract, the first batch of the delivery in June last year totalling about 2,000 had defective valves and were rejected by NOCK and the Ministry.

Out of the subsequent deliveries about 60 per cent were rejected for failing to meet the safety and quality standards relating to leakages and slow filling rates.

The EastAfrican has also learnt that though the supplier of the gas cylinders was a consortium, Allied East Africa was the major player, having been allocated the lion’s share of the cylinders to supply.

So far out of about 116,000 cylinders supplied, AEAL delivered about 66,000 while other members of the consortium including Surge Company Ltd and Accurate Company Ltd delivered about 36,000 and 7,000 cylinders respectively. MetalMate Company Ltd, a Thailand-based member of the consortium, supplied about 5,000 cylinders.

The National Treasury allocated $200 million in the 2016/2017 financial years towards procurement of subsidised gas cylinders for the three-year programme. In September 2017, the government advertised tenders for the supply of the second tranche, amounting to 720,000-6kg cylinders.

About 97 per cent of Kenya’s nine million households depend on traditional sources of cooking energy (firewood, charcoal and kerosene). Kenya has over 70 LPG marketing firms most of which are concentrated in the urban areas.

In East Africa, Kenya’s per capita consumption of LPG is 2.8 kg per year compared with Uganda’s 2kg and Rwanda’s 0.12kg.