Cabinet approves Sh63b for Arror, Kimwarer dams

On Tuesday, a source told The Standard that the approval will see the Italian firms caught up in the controversy, resume work.

"The relevant ministries will work on modalities of ensuring construction resumes immediately which will be a relief to people of the affected counties of Elgeyo Marakwet, Baringo and Uasin Gishu," said the source.

The government will work on a framework agreed upon under which court cases relating to projects will be settled.

"We have agreed on a framework to settle all court cases," said President Ruto during the meeting with Mattarella on his four-day official visit to Kenya.

In the dam fraud case, former National Treasury Cabinet Secretary Henry Rotich, his Principal Secretary Kamau Thugge alongside four others were charged with conspiracy to defraud and abuse office in 2019.

However, the office of the Director of Public Prosecutions dropped charges of 15 out of the 24 people they had taken to court, including Thugge.

"We have further committed, in good faith, to re-establish cooperation on the construction of Arror, Kimwarer, and Itare dams and other water and sanitation projects which are critical to our agenda on food security and climate action," Ruto said.

In 2019 the Italian firms moved to court seeking Sh12.4 billion in damages for the cancellation of the contract at a time when they had begun work.

The conglomerate, CMC Di Ravenna and Itinera Spa was contracted in May 2017 to construct two multi-purpose dams in Kerio Valley at a cost of Sh66 billion (Sh38 billion for Kimwarer and Sh28 billion for Arror) by the Kerio Valley Development Authority (KVDA).

In the case in the London-based International Chamber of Commerce, CMC Di Ravenna and Itinera Spa accused KVDA of irregular cancellation of the contract through an arbitration case at the International Chamber of Commerce.

In the arbitration case, the contractor wanted the tribunal to rule that the government, through the KVDA, cancelled the contract irregularly, abnormally and in an unlawful way and award it damages. The contractor also sought to have the Kenyan government meet the cost of the litigation.

In a meeting held on March 18, 2019, between KVDA, the CMC Di Ravenna and Itinera Spa and financiers, the firm raised concerns about the freezing of their accounts that had affected their operations, specifically paying for supplies and staff salaries.

They also noted that the sub-contractors had stopped trading with contractors due to fear of harassment, intimidation and negative publicity as beneficiaries of fraudulent payments.

Former President Kenyatta in September 2019 called for the cancellation of the Kimwarer project after it was found to be technically, economically and financially not feasible by a technical committee.

Former Infrastructure Principal Secretary Paul Maringa, who chaired the technical committee appointed by former President Kenyatta to look into the developments of Arror and Kimwarer dams argued that there was no current reliable feasibility study conducted on the project noting that the only study on a similar project was conducted about 28 years ago which revealed a geological fault across the 800-acre project area.

The committee also noted that the multi-purpose dams were overpriced and recommended a cost rationalisation plan.

Based on the recommendation, Uhuru okayed construction of Arror dam but scaled it down to Sh15.4 billion from Sh38 billion.