Return of the mack: What Joe Sang’s return to Kenya Pipeline means for the cash-rich Parastatal

By Isaac OGANGA 

The board of Kenya Pipeline Company (KPC) Tuesday 17, Januray 2023 announced the appointment of its former Chief executive Joe Sang as the new acting managing director of the cash-rich state corporation, barely weeks after being cleared of alleged corruption charges last month.

His appointment takes effect immediately paving way for the departure of Dr. Macharia Irungu who took over at the helm in 2020 following the exit of Mr. Hudson Andambi.

Andambi served as the acting managing director from December 2018 following the arrest and prosecution of the firm’s top brass.

The board however, declined to renew Irungu’s contract last week, reported Business Daily, ending his three-year tenure at the state corporation. He previously served as the managing director at Gulf Africa Petroleum Corporation (Gapco).

The Kenya Pipeline Corporation saw more than 100 middle-level managers forced to take up acting roles following the arrest of senior managers in two waves in late 2019 over the loss of public funds totaling more than Sh660 million.

Return of the ‘mack’

Lyrically, “Return of the Mack” a debut studio album by English singer-songwriter Mark Morrison is a song about bouncing back from a breakup better than ever – a timely and relevant happenstance that can best describe Mr. Sang’s return at the Corporation following an acrimonious departure five years ago.

Mr. Sang was appointed the MD of the State Corporation responsible for the storage, transportation, and delivery of petroleum products towards the end of April 2016.

But his tenure was cut short after he was forced to resign in December 2018 under what he terms as immense pressure and duress.

He and other senior managers of KPC were arrested on December 7, 2018, and charged with implementing the Kisumu oil jetty project which cost taxpayers an alleged loss of Sh1.9 billion.

He was been charged together with former KPC company secretary Gloria Khafafa, manager of the supply chain Vincent Cheruiyot, manager of infrastructure Billy Asaka, procurement manager Nicholas Gitobu, and general manager of finance Samuel Odoyo.

They were charged with abuse of office, engaging in a project without prior planning, and willful failure to comply with guidelines relating to the management of public funds in the construction of the Kisumu oil jetty.

Sang, a governance and leadership expert, settled on consultancies and dairy farming on his farm at Kabianga, Kericho County, and farming herbs in Elburgon, in the neighboring Nakuru County.

He also took to running and jogging to keep himself fit and relieve tension, doing an average of 70 kilometers a week.

What his ‘homecoming’ means for KPC

The return of Mr. Sang, according to insiders is expected to breathe fresh air into the company’s damaged reputation and dwindling revenue earnings.

During his tenure at KPC, the company’s profitability increased year on year to Sh12.5 billion in 2018, the highest ever in its history to date.

The company’s performance has been on a decline since then.

Key projects completed during that time include Line 5- the Mombasa-Nairobi pipeline, which was at 11 percent when he took over.

The completion of Line 6, the 122-kilometer pipeline from Sinendent to Kisumu, enhanced product supply in Kisumu, and built additional storage tanks in Nairobi, bottom loading facility in Eldoret, automation of actuators and key meters among other capital projects.

It was also during the period that the company developed and finalized the curriculum for the Morendat Centre of Excellence for Oil and Gas Pipelines as well as planning for infrastructure development for the center.

The initiative was to reclaim lost export markets and lobbied the Kenya Revenue Authority (KRA) for the synchronization of loading and clearance hours at KPC depots.

He is also credited with negotiating the capacity sharing initiative (Ullage) to be managed by KPC and tariff review with Energy Regulatory Commission (ERC), as the last review was done in 2009.

The former MD says he also resolved the historical product deficit of 15 million liters dating back to the 2009 issue and maintained a positive cash flow for the company by paying creditors on time and collecting debts when due with a closing balance of Sh6.3 billion as of November 30, 2018.