A team of top Kenyan security officials is in Italy seeking to recover money paid by Treasury for stalled Sh65 billion Arror and Kimwarer dams in Elgeyo Marakwet County.
Officials said Director of Public Prosecutions Noordin Haji, Director of Criminal Investigations George Kinoti and select State Law Office officers arrived in Italy yesterday with evidence of the said fraud to convince their Italian counterparts for action.
Part of the evidence is the Auditor General’s report that showed more than Sh4 billion was paid for the stalled work. The team had on Tuesday met Italian ambassador to Kenya Alberto Pieria and talked about fighting graft and related crimes.
“The discussions centred on possible collaboration between Italy, EACC, DCI and ODPP on capacity building, mutual legal assistance and investigation in combating corruption,” said Twalib Mbarak, the EACC CEO.
While in Italy, the team seeks to meet an Italian Government-owned insurer, Service Assicurativi Del Comercio Estero (SACE), which was paid Sh11.1 billion as insurance premium for a loan to build the two dams.
“We are paying interest on a loan that we don’t know about. In fact, we may default and that is why the team is in Italy to see how we can have the money back,” said an official aware of the issue.
Another official said: “The deal was government-to-government, however it has now turned commercial. We cannot secure a loan and also pay for the insurance of the same.”
He regretted that the loan had matured and that the government was required to start serving it without a project on site.
National Treasury CS Henry Rotich paid Sh11.1 billion as the insurance premium for the Sh65 billion loan to build the two dams.
Experts say this suggests that Kenya paid 15 times over the fair rate to the Italian government-owned credit insurer for insuring the loans procured from a consortium of banks led by Intesa San Paolo.
This formed a subject of interest for investigators to determine why SACE charged 17.5 per cent of the loan amount as premium, against industry rates averaging 1.5 per cent.
Rotich said his ministry was not involved after project identification, prioritisation and procurement were completed by the line ministry and the implementing agency, Kerio Valley Development Authority.
The team will also meet officials of the CMC di Ravenna, the contractor for talks.
Rotich also acknowledged that he released Sh7.8 billion to KVDA for onward transmission to CMC di Ravenna, as an advance payment to help kick start the project.
Advance payments of Sh4.3 billion were paid on December 22, 2017, for Arror (15 per cent of the Sh28.5 billion contract amount) and Sh3.5 billion on November 6, 2018 for Kimwarer, whose contract was worth Sh23.1 billion.
The probe files have been moving to and from the ODPP’s with various recommendations to charge at least 22 individuals.
The issue has divided Jubilee leaders, with some claiming they are being targeted for political prosecution.
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