Galana food project to get additional funding

Wednesday February 24 2016

By OTIATO GUGUYU
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The Israeli firm contracted by Kenya to undertake trials for the Galana-Kulalu food security project will get funding in the next few weeks.

Green Arava had been facing cash flow problems that had delayed the project which was due to be completed in March this year.

The government is pushing the firm to deliver the 10,000 acre model farm by July ahead of Prime Minister Benjamin Netanyahu’s visit and Cabinet Secretary Eugene Wamalwa says the financing arrangements to facilitate it, have now been concluded.

The government has received approval from treasury to start drawing the Sh7.2 billion loan from the Israeli government even as President Uhuru Kenyatta signed agreements for further development assistance on Tuesday.

Green Arava Water and soil engineer, Gideon Kedar told the Nation the company had not received payments in the last 7 months but with the new developments, they are looking to access the crucial fund in a matter of weeks.

“We are aware the process is well advanced and once we get the money, we will be able to complete the project in under nine months,” Mr Kedar said.

According to the National Irrigation Board, who are implementing the project, it has cost tax payers Sh2.5 billion since it was initiated.

The model firm is supposed to be funded by the loan from the Israeli government which was not drawn due to contentions in Parliament. Israel is also providing an additional grant of Sh3.5 billion for training.

The government says it now has an option of drawing only Sh5 billion from the loan or renegotiating with Israel to extend the project.

The facility is a 15 year loan agreement on 2.3 per cent interest, which the government considers a good bargain.

The project has received a boost after the parliamentary committee on Agriculture threw its weight behind it.

National Assembly committee on Livestock and Agriculture has been reviewing the project after it suspended it in December last year over concerns on costs.

The committee recommended that the multi-billion shilling Jubilee flagship project be suspended and re-evaluated rushing to make public their recommendations on the Galana-Kulalu food security project even before submitting it in parliament.

The Committee Vice Chair Karike Mbiuki told journalists that they were satisfied with the capacity of Green Arava after touring their establishments in Israel.

RESERVATIONS

“We had our reservations as to how the project was designed, Kenyans were not aware of the true picture and essence of the project. However the misconceptions have been put to rest,” Mr Mbiuki said in Israel during President Kenyatta’s state visit.

Mr Mbiuki said the committee had issue with costing which was addressed with the review of the whole project under the Water and Irrigation Ministry.

By omitting the Maize milling factory, school, police station, greenhouses, vegetable packing and cold rooms, the Water and Irrigation ministry says, the cost will come down to Sh7.2 billion from the initial Sh14 billion.

Irrigation Cabinet Secretary Eugene Wamalwa says the government will focus on irrigation and let the private sector invest in the other utilities.

Green Arava also want access to the project improved to reduce delays in fertilizer and chemicals during rainy seasons.

The government is keen on inking prospective deals during President Kenyatta’s visit and Mr Wamalwa said support from parliament is key in attracting investors to the project when it is opened to the public in September this year.

He said that his Ministry had gotten overwhelming interests in the irrigation project from several local and international firms.

The Galana project is expected to cut Kenya’s reliance on rain-fed agriculture that is blamed for the perennial food shortage by employing technology to cut cost of food production.

The jubilee government wants to develop 500,000 acres of the vast Galana/Kulalu ranch which covers an area of 1.78 million acres but with the irrigation potential estimated to be 1.2 million acres.

Galana River can only irrigate between 20,000 acres but with a dam, it will be able to irrigate about half a million acres.