Scandal-ridden Sh22 billion Kimwarer Dam, which saw the dramatic arrest and prosecution of Treasury Cabinet Secretary Henry Rotich, was not approved by the Cabinet, an audit report has disclosed.
Auditor General Edward Ouko, in a report tabled in the National Assembly yesterday, said there was no documentary evidence to show that the multi-billion-shilling project was officially sanctioned.
Arror Dam was, however, approved by the Cabinet, according to a memorandum of December 3, 2008.
Records show that Kerio Valley Development Authority (KVDA) entered into commercial contracts for Arror and Kimwarer multipurpose dam projects with Italian firm – CMC Di Ravena – at a contract sum of Sh28 billion and Sh22 billion respectively.
“Although the management indicates that the tendering process was informed by the Cabinet approval, the memo available for audit review indicates that only Arror was approved by the Cabinet. Therefore, Kimwarer was not approved,” reads the report that came two weeks after the prosecution of Rotich and 24 other top Government officials.
It has also emerged that KVDA had not handed over the site to the Italian firm after it failed to secure Sh7.7 billion to compensate locals displaced by the two projects.
This implies that the firm could not start the construction works that were estimated to take 60 months from April 2017.
The authority signed contracts with the contractor for the two projects on April 5, 2017, while the financing agreement was signed on April 18 the same year.
General conditions of the contract required the authority to hand over right of access and possession of the site to the firm for the commencement of the construction.
“Despite the three conditions required for the contract to come to full force, management has not provided documentary evidence of any formal handover of the site,” it adds.
KVDA blamed the delay on the Sh7.7 billion required for compensation and said the National Treasury only released Sh643 million.
“Under the circumstances, the management is in breach of the contract period. In addition, management did not provide revised contract period to take into account the new development,” says the report.
Documents by the authority indicate actual amount received from the National Treasury was Sh643 million for resettlement and compensation in the Arror project.
Of the amount, Sh8 million was spent on public participation and sensitisation on the project as at June last year.
Further records indicate that Arror and Kimwarer dam projects were to be established on approximately 1,600ha comprising 400ha of forest land and 1,200ha private land.
The KVDA consequently engaged the Kenya Forest Service (KFS), which granted permission for the authority’s contractor to access forest to undertake detailed studies.
It also requested KFS, through the National Lands Commission, to allow utilisation of 400ha of forest land for construction of the two dams in exchange of 570ha to be acquired from private people for conservation.
But KFS early this year made a U-turn and declined to surrender part of its forest land for the project.
“Available information revealed that the National Land Commission published Kenya Gazette Notice No 925 of February 1, 2019 for intention to acquire parcels of land for Arror and Kimwarer projects. However, information revealed Kenya Forest Service vide letter dated February 13, 2019 revoked earlier approval to access portion of its land for the project,” adds the audit report. Ouko now warns that the projects may fail to take off due to lack of money to acquire land.
“Consequently, at the time of audit in February 2019, more than 22 months after contract agreement was signed, the authority is yet to complete the process of acquiring project land from affected residents and it is not known when the process will be completed,” adds the report.
The Government is currently considering terminating another contract – Itare Dam – it entered with the firm after it was declared bankrupt.
Water Cabinet Secretary Simon Chelugui, however, previously told Parliament that the country was at risk of losing Sh11 billion already paid.
Apart from CS Rotich, the scandal surrounding the project also saw Treasury PS Kamau Thuge, her East Africa Community counterpart Susan Koech, and KVDA Managing Director David Kimosop among other senior State officers, charged.