Dr Macharia Irungu
MD & CEO – KENYA PIPELINE
Having paid Sh2.7bn dividend to the government at the end of 2020 on the back of revenue growth of Sh31.5 billion in the financial year 2018/2019, representing an increase of 14%, the Kenya Pipeline Company (KPC) stands out as the top most performer among the state-owned enterprises (SOEs).
The KPC throughput volumes increased to 7.4 billion litres compared to 6.6 billion recorded the previous year, with cash flow reserves rising from Sh5.3 billion to Sh12.9 billion during the period under review.
Speaking at the company’s annual general meeting, chairman Rita Okuthe said cash flow reserves increased from Sh5.3 billion to Sh12.9 billion during the period under review. “Our continued growth has enabled us remain a self-sustaining commercial entity; financing our operations. We are committed to support the government through the exchequer to deliver on its mandate,” Okuthe added.
The KPC asset base stood at Sh135.6 billion as it turned out a profit before tax of Sh3.2 billion for the period ended June 30, 2019.
KPC Managing Director Dr Macharia Irungu states that over the last couple of years, KPC has provided a good return on investments (ROI) to its shareholder.
‘’We have grown to be one of the largest SOEs in Kenya. During the last eight years, KPC generated over Sh80 billion in profits before tax and paid over Sh 50 billion in taxes to the government during the period,” Dr Irungu states in the end year report.
Dr Irungu adds that the completion of three major projects including the Mombasa-Nairobi pipeline (Line 5) and additional storage tanks in Nairobi during the 2017- 2018 Financial year, positioned KPC as a strategic player in storing and transporting refined petroleum products in the country and the East African region.
The Company also received unqualified audit opinion from the Office of Auditor General for the period under review.
KPC is set to play a much bigger role as a strategic state agency in the vital and growing oil & gas sector because of its increased operational efficiency, John Ngumi, the immediate past chairman, when handing over the reins of leading the KPC Board to Rita Okuthe.
In a statement to staff then, Ngumi acknowledged that his 5-year tenure at the KPC has registered many notable achievements and he bows out of the company a happy man with his head held high.
“Since I joined the Board as Chairman in April 2015, we have seen astounding achievements, and suffered setbacks that could have been fatal to any other company that did not have KPC’s long history, resilience, resources and people,” Ngumi told the KPC staff then.
“We have seen KPC dramatically raise its financial game over the last five years. We managed to complete and bring into operation massive investments amounting to nearly KES 60 billion including the new Mombasa-Nairobi pipeline (Line 5), new Sinendet-Kisumu pipeline (Line 6), additional storage tanks in Nairobi Terminal and Eldoret and Kisumu Bottom Loading facilities,” Ngumi observed.
The former KPC Board boss said that when the KPC took on one of the largest ever corporate loans in Kenya in 2015, US$ 350 million (KES 35 billion), to help finance the construction of Line 5, that was a major milestone in Kenya’s corporate history.
“This loan was extended by banks purely on the basis of KPC’s balance sheet strength; the lenders did not ask for or need a government guarantee. We have continued servicing that loan satisfactorily to the tune of nearly KES 2 billion every quarter,” he informed staff.
Ngumi also hailed KPC for successfully managing the operations and performance of another parastatal, Kenya Petroleum Refineries Limited. The KPL is in the process of finalising the complete integration of the two SOEs.
Working with Kenya Ports Authority and Kenya Railway Corporation, KPC has also helped commence the rejuvenation of Kisumu Port as a major regional fuel transport hub because transporting petroleum products to the region is a major part of the Lake Victoria Transport Initiative.
“We await the completion of Uganda’s two oil jetties on the other side of Lake Victoria before we can operationalise Kisumu Oil Jetty, which is ready for use,” Ngumi said while hailing KPC for working with Kenya Railways, the Kenya Defence Forces and the National Youth Service in bringing back into operation the Nairobi-Nanyuki Railway, which is going to be transformative for the Mt Kenya and Northern Kenya regions.
“KPC paid to the Government KES 11.8 billion in dividends in the previous year out of which KES 1.8 billion was expended by the Government on the Nairobi-Nanyuki Railway,” he added.
Ngumi told staff that Covid-19 and its aftermath have brought out the best side of KPC. The corporation moved quickly to work with Government, corporate partners and other Kenyans to produce over 1.5 million litres of sanitisers for free distribution to needy Kenyans across the country.
“We also made a grant of KES 55 million to the NYS, which enabled them produce 1.5 million masks, also for free distribution to needy Kenyans,” he concluded adding that KPC has indeed improved relationships with stakeholders namely the shareholders, oversight agencies, and business partners.
The current chairman Rita Okuthe said during the handover ceremony that she was very grateful for the privilege to serve the people of Kenya in the new capacity.
“I thank His Excellency President Uhuru Kenyatta for the confidence he has bestowed in me. I will serve the nation with selfless dedication and hard work,” said Okuthe who is the first ever lady to chair the KPC Board of Directors.
John Ngumi is now Chairman of the Industrial and Commercial Development Corporation (ICDC) having been appointed by President Uhuru Kenyatta on Friday, August 7, 2020.
The move came after the President signed an executive order governing the operations of the Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and the Kenya Pipeline Company (KPC). The order is set to guide the central management of public port, railway and pipeline services under the Kenya Transport and Logistics Network (KTLN) with the coordination of the Industrial and Commercial Development Corporation (ICDC) Board.
Dr Macharia Irungu joined KPC in November 2019 following one of the most rigorous recruitment processes ever conducted for a CEO, by the board of directors and closely observed by the Public Service Commission (PSC) from an initial list of 88 and shortlisted to 9.
Prior to this appointment, Dr Irungu was the CEO of Gulf Africa Power Company (GAPCO) a member of Total Kenya Group, and CEO of the road-safety NGO Safe Way while a strategy and communications director with Total Kenya.
Dr Irungu holds a BSc degree in Chemistry from the University of Nairobi, an MBA degree from the National University-USA and a PhD in Strategic Management from the University of Nairobi.
On December 12, 2020 Dr Macharia Irungu was conferred the award and honour of The Moran of The Order of the Burning Spear (MBS) by the President of Kenya, in recognition of distinguished and outstanding service rendered to the nation in the various capacity and responsibilities he has held.
- Oil & Energy Industry Leadership
- Strategic Management
- Road Safety
- Turnkey Project Management
- Capital Expenditure Management
- Integrated Transport Management