Agency disputes figures paid to Italian dam contractor

Kerio Valley Development Authority (KVDA) Managing Director David Kimosop left shows a team of experts the extent of the projected 77000-acre irrigation scheme at lower Turkwell on the border of West Pokot and Turkana counties. [Photo: Fred Kibor]

The management of Kerio Valley Development Authority (KVDA) says it paid Sh7.6 billion to an Italian dam contractor and not Sh21 billion as alleged.

In a newspaper advert yesterday, KVDA said the contractor - CMC Di Ravenna - was paid in two batches to construct Arror and Kimwarer dams in Elgeyo Marakwet County.

The state agency said Sh4.2 billion was paid in December 2017 for Arror dam, while Sh3.4 billion was paid for Kimwarer dam in November 2018.

The two dams are set to cost Sh63 billion.

Treasury documents

“The payments were done against insurance and bank guarantees respectively, and are to enable the contractor to do mobilisation and designs as contained in the conditions of the contract,” KVDA said in the advert.

“Advance payment is a loan to the contractor that will be recovered from subsequent certificate of work done. Advance payment is made in all contracts of this nature.”  

The two projects are being investigated by the Directorate of Criminal Investigations (DCI) in the wake of claims that State officials connected to the project accepted bribes.

However, investigators handling the file insist that after examining documents obtained from Treasury, Sh20.9 billion has since been paid to the contractor for the two projects. 

For instance, in the Arror dam case, detectives say, an advance payment of Sh4.5 billion was made. Another Sh6.1 billion was paid to an Italian insurance firm, SACE S.p.A, and a commitment fee of Sh490 million was also paid, making it a total of Sh11.1 billion.

For Kimwarer dam, the detectives established that Sh4.99 billion had been made as advance payment.

Another Sh3.5 billion was paid as a commitment fee, while the same Italian insurance company received Sh418 million, making it a total of Sh8.9 billion.

The DCI officers also established that Sh900 million has been spent as compensation for land acquired for the projects.

According to its website, SACE S.p.A. provides a range of insurance and financial products in Italy and other countries.

The company, founded in 1977 and headquartered in Rome, says it insures trade receivables against the risk of non-payment.

The investigators believe that Sh4 billion was wired back to the country and paid as kickbacks through a bank in Westlands, Nairobi.

The directors and senior managers of 107 firms that were paid money by the contractor to offer various services and to supply goods have recorded statements with investigators.

The directors of CMC Di Ravenna have also recorded statements, as well as KVDA Managing Director David Kimosop and Treasury Cabinet Secretary Henry Rotich.

Ruto defence

Yesterday, Deputy President William Ruto voiced his support for KVDA against the graft allegations. He dismissed claims that Sh21 billion vanished through corruption networks.

“It is a flat lie. The money in question is just about Sh7 billion and for every coin that has been paid, we have a bank guarantee. No money will be lost because we are a responsible Government,” said Dr Ruto.

“We have engaged all arms of the Government to ensure that public resources are safe.”

Police officers who have visited the site, as well as journalists, say that the contractor has yet to start operations.

But KVDA claims that work has started, with the contractor being on site for the past year.

The activities that KVDA claims have been undertaken include topographical survey, land valuation and mobilisation of personnel, who include 60 experts and 70 locals.

The others are the acquisition of temporary offices and residential space for staff, procurement of initial materials, and survey and mapping of irrigation areas.

KVDA also insists that Kenya Forest Service has granted access to 400 hectares of forest land for the proposed dam sites in Kipkabus and Chesoi reserves.