alexa Agency seeks Sh9 billion for Galana-Kulalu, Green Arava, - Daily Nation

Agency seeks Sh9 billion for Galana-Kulalu, Green Arava,

Saturday March 14 2020

Galana Kulalu

A maize farm at Galana-Kulalu in Tana River County as pictured on July 24, 2019. The project has not been a success. PHOTO | FILE | NATION MEDIA GROUP 

JULIUS SIGEI
By JULIUS SIGEI
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After many false starts and billions of shillings spent, government officials are confident that President Uhuru Kenyatta’s pet project that, on paper, was the solution to our food problems can be realised.

The Galana-Kulalu Food Security Project will be up and running, the officials say, if Sh9 billion is injected into it and the project is better managed.

The National Irrigation Authority (NIA) is seeking the money to expand the scheme, even with earlier questions about its viability.

Its managers, however, maintain that the project, which has already consumed Sh5.9 billion, is good value for money and are upbeat that it is doing well.

Documents seen by the Saturday Nation show that NIA needs Sh5.5 billion to “reduce the cost of operations and maintenance of the project”, while Sh4.2 billion will go into connecting the farm to the national electricity grid and harnessing solar power.

The bulk of the Sh5.5 billion, (Sh4 billion) will go into bringing another 10,000 acres of land into cultivation.

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Other listed expenditure items are installing a centre-pivot irrigation system to cover the remaining 4,200 acres (of the initial 10,000 acres) at an estimated cost of Sh600 million, and building a second intake to support the model farm’s expansion for Sh600 million.

The agency also appears keen to proceed with the project without Green Arava, the Israeli firm that was implementing the project but abandoned it in 2018, citing “sustained failure by NIB to honour payments when due”.

The firm and the agency are embroiled in a dispute regarding the amount owed to the former. Last year, Green Arava claimed NIA owed it Sh1 billion, even as the authority insisted the figure was Sh200 million.

“We now only owe them Sh8 million. And we intend to charge them for delayed income. They need to compensate the employer for lost income,” NIA head of design and planning Charles Muasya said this week.

A status report says the contractor is being charged liquidated damages for delays after it left incomplete works.

“The completion date has expired, and the performance bond has not been renewed and the employer called the bond of Sh97,967,863.00. The contractor can only continue implementation while being charged liquidated for delay,” the report says.

It says that NIA has taken over the completed sections of the project and has started putting 3,300 acres under production progressively.

It says 3,200 acres have already been prepared for planting and 2,384 acres planted. It adds that maize was being harvested in some sections, with a total of 36,542 bags already bagged and stacked.

NIA says it has engaged the services of other contractors and repaired the pumping station, roofed the pumping booster station for the drip area and built a maize storage facility due to the contractor's failure to do the work. All costs will be recovered from the contractor, the report says.

 In a report tabled in Parliament in November 2018, the Auditor-General warned that Kenyans risked paying more in the Sh7 billion loan from the Bank Leumi of Israel to fund the project.

Most of the loan terms are not in the best interest of Kenyan taxpayers, the auditors said, pointing out that the interest will be determined from time to time by the bank depending on economic conditions.

Auditors had also questioned why the board had leased 20,000 acres when the model farm only covered 10,000.

There have also been questions of the suitability of the area for maize-growing, but NIA officials point to the bumper harvest of recent years, which has reached 30 bags an acre.

Then there were concerns of inflation of costs. But Mr Muasya insists the expenditure was value for money, arguing the Sh580 million the agency used for clearing bushes, also included levelling.

He told the Agriculture Senate Committee, last year that the authority spent Sh40,000 an acre for clearing and Sh68,000 for levelling the land.

And in an interview this week, he said the he figure was value for money because the place was forested and vast. "It was not merely clearing bushes. We were also levelling the land. If you do your math it will add up.”

Mr Muasya defended the project, saying that it has had better performance since Green Arava left. He says with the diesel engine irrigation system, the project is harvesting between 25 and 30 bags per acre against the national average of 16-17 in the high potential areas.

He reckoned that connecting the firm to the national grid would bring down the current cost of producing per acre (Sh58,000) by Sh17,000.

“The success of the Galana-Kulalu Food Security Project was not pegged on the presence of Green Arava. What is remaining is something we can do. We shall get allocation on the remaining 15 per cent of the works,” said Muasya.

In September 2014, NIA signed a Sh14.5 billion contract with Israeli firm Green Arava Ltd to start irrigated maize farming in the Galana-Kulalu scheme in Kilifi and Tana River counties.

The figure was later scaled down to 7.2 billion after some components such as milling were done away with. A logistics centre with a school, a dispensary and a police station, was also dropped.

The contract was for a duration of 30 months and was set for completion in March 2016.

The contractor was expected to complete the construction and installation of irrigation infrastructure within 18 months and test the system during a defects liability period of 12 months.

The contract was later extended twice before the contractor abandoned the project in 2018.

Green Arava chairman Yariv Kedar accuses the ministry of Agriculture of frustrating the company in its bid to ship in equipment for the completion of the works.

But NIA chairman Joshua Toro retorts: “They file papers contrary to Finance Management Act and expect us to pay. To safeguard government money, we ask for the bill of lading. An invoice is not enough.”

The NIA officials’ stance dampens hopes of Israeli officials who are keen on the resumption of the project.

Israeli ambassador in Kenya Oded Joseph last week sounded optimistic about the revamping and expansion of the irrigation project and other model farms “because they are at the heart of Kenya-Israel relations.”

He said: “We are making huge and committed efforts to put relevant players together to make the right decisions to put Galana back on track. I have been in conversation with all the key leaders and my sense is that the project will be brought back on track. We have no choice but to succeed. The project will help address President Kenyatta’s Big Four agenda item of food security.”

President Kenyatta has staked his legacy on the four pillars of universal healthcare, housing, agriculture and manufacturing.

Mr Joseph, who would not be drawn into commenting on the details that led to Green Arava abandoning the project, defended the viability of the project, saying the analysis given by Kenyan and Israeli researchers was satisfactory.

“I agree that the project may not have been handled in an ideal manner, but even where there was criticism the fact that maize was grown for two seasons and with that yield of 40 bags an acre that is great. Can you imagine if it was one of the regions of the Rift Valley or Central Kenya?”

Kenya has not been able to fully feed its population and has always relied on importation because of overreliance on rain-fed agriculture. The success of Galana-Kulalu was seen as an answer to this shortage.

Appearing before a Parliamentary committee, then Agriculture Cabinet Secretary Mwangi Kiunjuri admitted that the project had been marred with corruption, blaming people he did not name for inflating the costs.

Additional reporting by Rushdie Oudia.