Kenya: 15 Ways Officials Plotted to Defraud Kimwarer and Arror Dams Funds

According to the Director of Public Prosecutions (DPP) Noordin Haji, by January, a total of Sh19.7 billion had already been processed as advance payment for the Kimwarer and Arror dam projects, four years down the line, there is no evidence that land had been acquired for the projects.

The funds paid are about 30 percent of the estimated project costs.

DPP Haji said it was "a well-choreographer scheme by government officers in collusion with private individuals and institutions."

Here, in a simple explainer, we show how the billions of shillings were unjustifiably and illegally paid out.

The National Environment Management Authority (Nema) approved an Environmental Impact Assessment (EIA) which gave the nod for the projects yet there is no evidence that it was ever carried out. The environmental agency also ignored protests from other state agencies not to approve the projects.

2. NATIONAL TREASURY

Sh643 million was released by the National Treasury for the compensation and resettlement of people who would be affected by the said projects, yet there is no evidence that land has been acquired.

3. KENYA FOREST SERVICE

Officials insisted on going on with the projects despite opposition by the Kenya Forest Service on an excision of forest land to build the dams.

4. KVDA

So as to circumvent the process to ensure that Italian firm CMC di Ravenna got the contract, the Kerio Valley Development Authority (KVDA) used the Public Procurement and Disposal Act of 2005 for the concession despite the fact that the law in 2013 prescribed Public-Private Partnerships (PPP).

5. CMC DI RAVENNA

Officials went ahead to award the contracts to CMC di Ravenna despite being aware that the firm was getting into voluntary liquidation back in Italy.

6. MEGA PROJECTS

CMC di Ravenna was awarded the contract despite being awarded three other mega projects that were either incomplete or yet to commence.

7. SUPPLIERS

KVDA officials refused to allow competition among suppliers for the contracts.

8. LOAN

Whereas the commercial contracts states that the contracts would cost Sh46 billion, the National Treasury negotiated a loan increasing the amount to Sh63 billion. This was an increase of about Sh17 billion.

9. DESIGNS

CMC di Ravenna submitted draft technical designs in February 2019, four years behind schedule.

10. EUROS

The National Treasury entered into a facility contract in Euros while the commercial contracts were in US dollars, thus occasioning further loss through exchange rates.

11. INSURANCE

Sh11 billion for insurance was paid upfront yet a government guarantee would have sufficed at no cost to taxpayers.

12. INTEREST LOAN

Sh4.6 billion was borrowed in addition to the principle amount to pay interest in advance during the construction period, which to date has not commenced. This means that the government borrowed a loan and later on borrowed another loan to pay the interest of the first loan.

13. DEBT

Treasury officials went ahead to borrow a loan amounting to Sh61 billion for the construction of the dams, despite being advised of the high debt stock.

14. INDIVIDUAL BANK ACCOUNTS

The borrowed funds did not pass through the Consolidated Fund accounts but went direct to individual bank accounts in effect guaranteeing that no one was oversighting its use.

15. NO WORK

Sh19,714,366,991 has so far been paid by January 2019 as advance payment, commitment fee, insurance and other costs, yet no work has started so far.

See What Everyone is Watching

More From: Nation

Don't Miss

AllAfrica publishes around 600 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.