An Italian firm at the centre of the multi-billion shillings’ dams’ scandal has denied reports that the company is bankrupt.
“Neither CMC di Ravenna or any of its subsidiaries have been declared bankrupt or insolvent. We remain absolutely committed to completing all the construction projects that are planned and underway in this country within the contracted timeframes,” the company said in an ad placed on the Standard Newspaper.
In a paid up newspaper advert, the company claims it has a track record of completing major construction projects to the highest standards.
“As of 2018, the company generated over 70 per cent of its turnover from its overseas operations. It has an orders portfolio that has risen to 4.5 billion Euros (Over Sh400 billion) and is currently active in approximately 40 countries in four continents, with more than 30 branches in the different countries where it operates including Kenya,” it said.
The firm’s statement comes barely a day after a court barred it from selling its assets to offset a loan it owes one of the local banks.
On Monday, Justice Francis Tuiyott granted orders stopping CMC Di Ravenna from transferring, selling or disposing of its assets until a suit by Barclays Bank of Kenya seeking to recover the loan is determined.
Justice Tuiyott also ordered CMC Di Ravenna to surrender all the 98 vehicles and equipment it had already purchased for the construction of Arror and Kimwarer multi-purpose dams in Elgeyo Marakwet County for safe custody.
Barclays Bank, through Iseme, Kamau and Maema (IKM) Advocates, argued that it fears the company is about to go under before repaying Sh595,655,552 it borrowed to finance the purchase of the equipment.
Lawyer Kamau Karoli submitted that the company has already filed an insolvency case in Italy and that unless the court allows the bank to preserve the equipment, it will lose a substantial amount of money.
“Their insolvency case was admitted by the court in Italy which shows they are not in a position to settle the debt owed to the bank. They are likely to proceed and dispose off their assets without repaying the loan if let to go,” said Karoli.
The firm won three contracts for Itare Dam project, Arror Dam Project and Kimwarere Dam Project.
On the Itare Dam Project, it signed a contract of Sh28 billion with Rift Valley Water Service Board on 15/05/2015 and its completion date is set at May 2021. The company says it has completed 30 per cent of the work worth Sh7 billion.
On the Arror Multipurpose Dam Project, the firm signed a contract with Kerio Valley Development Authority on 05 /04/2017 and was paid an advance payment of Sh277, 407, 605 on 28/12/2017. The project was to take 60 months to complete.
CMC Di Ravenna faulted the slow pace of work at Itare Dam on delays from Kenyan authorities in granting the necessary project exemptions.
Additionally, it noted that the Rift Valley Water Service Board delayed in issuing a project commencement date and in acquiring the site.
“There have been delays in payments from the Rift Valley Water Service Board for the work already done, mostly due to delays in its need to ensure compliance with environmental and social issues,” it says.
It has not yet gained possession of the Arror and Kimwarer sites, but says it has initiated premobilisation activities such as setting operative offices, purchasing equipment and setting temporary accommodation for its staff.
The firm, which was formed in 1901 by a group of construction workers, said it has behaved with propriety and probity on all occasions and will cooperate fully with any relevant investigations.