How Nema fell prey to scam and lost millions

By Alex Ndegwa

A State Corporation defrauded the National Environment Management Authority (Nema) Sh8 million.

This is according to revelations on the extent of rot in the water sector.

National Water Conservation and Pipeline Corporation (NWCPC) grossly undervalued the cost of building five dams in Environmental Impact Assessment (EIA) reports.

To get EIA license, Nema is paid a statutory fee equivalent to 0.1 per cent of project cost. The dams under construction are Chemususu, Kiserian, Umaa, Maruba and Badassa, all valued at Sh10 billion, but NWCPC only paid Nema Sh1.9 million.

Committee Shocked

Yesterday, Nema officials shocked Parliament’s Lands and Natural Resources Committee with the admission. After MPs cited the actual project costs, it was apparent that Nema had been misled into charging lower licensing fees.

The committee investigating alleged widespread corruption in the water sector, heard that NWCPC paid Nema Sh1.9 million, yet calculations based on actual project costs show Sh10 million was due.

The fraudulent transactions unraveled when Nema acting director Ayub Macharia said NWCPC paid Sh439,100 as license fees for Chemususu and a similar amount for Umaa. dams, meaning the stated cost of each of the dams was Sh439 million.

Committee chairman Mutava Musyimi, however, interjected noting Chemususu in Koibatek District actually cost Sh4.8 billion, while Umaa in Kitui District was Sh824 million.

Dr Macharia and the Director of Compliance and Enforcement Benjamin Langwen were surprised.

Further disclosure that NWCPC paid Sh912,834 for Badassa Dam in Marsabit and Sh148,150 for Kiserian Dam infuriated the MPs.

Calculations based on actual figures show Nema was entitled to Sh2.4 million and Sh1.06 million respectively. It meant NWCPC had stated the cost of the dams as Sh912 million and Sh148 million respectively instead of Sh2.4 billion and Sh1.06 billion.

Yesterday, Shinyalu MP Justus Kizito said the missing amount must have ended in individuals pockets. "This money is somewhere. You must tell this committee whether you are part of the cover-up," said Mr Kizito.

Macharia said Nema was not party to any such scheme, but admitted Nema had lost a lot of money through undervaluation of project costs.

"We get a raw deal because proponents know that Nema doesn’t have the capacity," he added.

Asked what action Nema would take, Macharia said: "They (NWCPC) will have to top up the difference."

Earlier, the committee heard the custodian of the country’s forests was kept in the dark over the dams, which are located in gazetted forests.