MPs suspend Sh188 billion dam projects, call for probe

Water and Sanitation CS Simon Chelugui (R) with his Water Secretary Sao Alima when they appeared before the National Assembly Environment Committee on the construction of Dams at Continental House, Nairobi on March 5, 2019. [Boniface Okendo,Standard]

A House committee has suspended 24 dam projects and ordered an investigation into the loan-funded programmes.

The National Assembly’s Environment Committee accused “tenderprenuers” and State officers of turning the Sh188 billion projects into cash cows by demanding kickbacks from contractors.

The Kareke Mbiuki-led team yesterday ordered Water Cabinet Secretary Simon Chelugui to freeze the projects until all the land was paid for.

This after it emerged that the Government was implementing major water projects before paying property owners.

The committee also directed the Ethics and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to begin investigations into the loan projects.

The MPs noted that the Engineering, Procurement, Construction and Finance (EPCF) model of contract was being abused.

The EPCF is a contractual model where the successful bidder mobilises resources through a loan, provides engineering design services, procures all major materials and equipment and serves as the general contractor.

The Arror and Kimwarer dams, which are currently entangled in corruption allegations, were awarded to Italian firm CMC di Ravenna under this model.

“Kenyans are not getting value for money in this model. This is a cash cow being used by tenderprenuers to swindle Kenya. It is the modern-day Anglo Leasing,” said Mr Mbiuki.

Mr Chelugui admitted that the model was prone to abuse if not properly managed.

“This model is not as bad as you have stated because we can realise the intended project without straining our resources. But I agree it can be abused if not properly managed,” he said.

The minister also defended himself from involvement in saga surrounding the two dams, saying that the troubled projects were not under his Water and Sanitation docket.

He was hard-pressed to explain why the ministry handed the Itare Dam project to the Italian company without doing due diligence.

The question was triggered by reports that the Italian firm had filed for bankruptcy after abandoning projects in another country.

Kisumu Woman Rep Rosa Buyu said it was a sign of negligence by the ministry to award a tender to the firm when it was about to go bankrupt.

“This means we did not carry out background checks to ascertain the firm’s capacity to implement the projects,” said Ms Buyu.

Chelugui told the committee that the ministry had given the Italian firm two weeks to update it on the bankruptcy matter.

“The contractor maintains they have heavy machines and equipment on the ground,” said the CS.

Chelugui told the MPs the ministry had three options: to assume everything was okay and wait for the firm to complete the project as agreed; to terminate the contract; or to allow the company to sub-contract other firms with the capacity to complete the project.

“If we decide to terminate the contracts based on the information we get from the media, we may lose the funding as well as risk lawsuits.”