The Kenya Power and Lighting Co (KPLC) is bankrupt, according to a cabinet committee. The committee, set up to review the viability and performance of 139 state-owned companies, said that the company is in essence insolvent and is surviving only as a result of the goodwill of its creditors and of the government.

The committee has urged the company to put in place a strong internal control system to enhance transparency and accountability. It also indicated that there was a need to review and rationalise the KPLC management to enhance good corporate governance.

KPLC was originally set up as the state utility to generate, transmit and distribute power. The introduction of private sector competition and the creation of the Kenya Electric Generating Co (KenGen) has left KPLC with responsibility for transmission and distribution.

KenGen did not escape comment from the committee. In its memorandum to the government it indicated that the generator must upgrade existing generating plant and equipment and diversify into other forms of power generation.

This is relatively benevolent compared to the treatment suggested for some other companies. It recommends that the government pull out of a number of corporations, including Kenya Petroleum Refineries and the National Oil Corporation. Others should be restructured and some, such as the Kenya Sisal Board, should be liquidated, it said.