Kenya Power halts bills deal with Uchumi
Kenya Power has suspended its bill payments service at Uchumi Supermarkets, claiming the retailer had repeatedly delayed submitting cash paid in by customers.
On Tuesday, the power distributor said it has temporarily put on hold the deal earlier signed with Uchumi.
“Kenya Power wishes to inform its esteemed customers that due to unavoidable circumstances bill payment through Uchumi Supermarket outlets has temporarily been suspended,” said Kenya Power in a notice.
The electricity transmitter told customers who pay their monthly bills at the retailer’s cash tills to pay at alternative points.
Kenya Power managing director Ben Chumo said in an interview that the decision to suspend the Uchumi contract was reached after numerous failed deliberations to remedy the situation that eventually led to the termination of the partnership.
“We had a Memorandum of Understanding with Uchumi that allowed them to collect payment from our customers either paying their bills or buying power tokens and later submit the proceeds to us. Uchumi has been delaying to deliver the payments back to us and we decided to end the partnership until further notice,” said Dr Chumo.
“We also found out that Uchumi supermarket was trading using our money without our knowledge,” he added.
Uchumi chief executive officer Jonathan Ciano declined to comment on the matter, saying he was held up in a day-long meeting. He did not also respond to text messages sent to him on the issue.
Kenya Power has been partnering with main retailers and mobile service providers like Safaricom and Airtel to ease customer bill payments and decongest its banking halls.
The firms facilitating the payments get a certain commission based on their value of transactions.
Uchumi Supermarkets is Kenya’s only publicly listed retailer. It has in the recent months faced pressure from its suppliers who claimed their payments were getting delayed.
Last year, Mr Ciano told shareholders during the retail chain’s annual general meeting that the supermarket was working on new terms with the suppliers that would give Uchumi longer repayment periods to avoid straining its cash flows.
At about the same time, Uchumi borrowed Sh405 million from the Co-operative Bank to pay its suppliers and end the row that had affected the running of its outlets.
It also turned to Kenya Commercial Bank for a Sh600 million loan to fund expansion.
In a rights issue held last year, Uchumi raised Sh896 million that was earmarked for expansion and upgrade of old branches.
This article first appeared in the Business Daily