A company associated with Deputy President William Ruto’s Chief of Staff, Mr Ken Osinde, and other big shots has been caught up in the Sh21 billion dams scandal as criminal investigations into two phantom projects in Elgeyo-Marakwet County began.
The Directorate of Criminal Investigations Tuesday started to examine how the billions of shillings paid to an Italian firm by the National Treasury for the construction of the Arror and Kamwerer dams was shared.
Mr Osinde, a former envoy to Germany, Romania and Bulgaria, is listed as a director of Sanlam General Insurance Ltd, together with Telkom Kenya chief executive officer and former director-general of the Kenya Vision 2030 Delivery Board Mugo Kibati, and the estate of the late Cabinet minister John Michuki. Also listed is the estate of the late billionaire Godfrey Karuri.
On Tuesday, the company sent one of its directors, Mr George Ngugi Kuria, to the Directorate of Criminal Investigations to explain why the firm was paid close to Sh47 million by Italian firm CMC di Ravenna-Itinera, which is at the heart of the Sh63 billion dams scandal.
The top insurance officials are among more than 120 directors of various companies thought to have had a dalliance with the firm contracted by Kerio Valley Development Authority in 2017 to build the Arror and Kimwarer multipurpose dams.
“We shall pursue the insurance company to tell us what they insured, and if they insured the project, they will have to pay Kenyans for the loss,” said Mr George Kinoti, the Director of Criminal Investigations.
Another insurance company caught up in the mix is Heritage, associated with tycoon Ramesh Vora, former Attorney-General Charles Njonjo and former Head of Civil Service Jeremiah Kiereini. Also summoned is former Cabinet minister Simeon Nyachae’s Kentainers Ltd.
At the moment, there is no evidence yet to indicate that the named directors were part of a syndicate that siphoned money out of the Treasury. The money was ostensibly released to settle people who would be displaced by the dam.
On Tuesday, the DCI revealed that some of the directors told investigators that they had been asked to deliver material — unrelated to the construction of a dam — to a yard in Eldoret and in Nairobi.
“One of the companies told us they delivered towels worth Sh20 million, while another delivered tiles and carpets. We are asking them how this is related to the construction of a dam and they are not able to answer,” said Mr Kinoti.
Some of the companies asked to “assist” in the ongoing investigations include Tile and Carpet Centre and Silent Night (K) Ltd. The latter says on its website that it deals with “mattresses, bedding, headboards and luxury towels”. School Depot Kenya Ltd, a supplier of school uniforms, is also listed.
Others were tour and travel companies, including Charleston Travel and Express Tours and Travel.
“What we do not understand yet is how people supplied materials for a project that had not even started. We also do not understand how money was disbursed yet there was no proper documentation,” said Mr John Kariuki, director of the Investigations Bureau.
While the DCI says various company directors recorded statements at different times yesterday, Mr Kariuki added that it was “too early to say who among them had a case to answer”.
“For now, we are just analysing the documents they came with and taking statements from them. We cannot say at this point that someone is guilty of an offence or not,” he said.
The construction was to commence in December 2017. Fourteen months later, and after the Treasury paid Sh21 billion, according to the investigators, the contractor has not started any works.
On Tuesday some representatives of 17 companies appeared at the Directorate of Criminal Investigations to shed light on payments made by the Italian firm, which is said to have filed for bankruptcy.
Detectives took copies of tender documents, including invoices, quotations and delivery notes for investigations into the project.
Mr Kariuki told the Nation that investigations would unearth the downward cash flow from the contractor to all suppliers, with the aim of establishing who received how much and for what.
The two projects have turned out to be Kenya’s first multibillion-shilling phantom project, and detectives are wondering how Kerio Valley Development Authority officials and the Treasury paid out billions of shillings for a project whose feasibility study had not even been done.
So brazen is the scandal that money was paid to a contractor, CMC di Ravenna, who has never been on the site, and for a project that has not been designed.
How a bill of quantities was arrived at without the design has baffled investigators, who are trying to unwrap a puzzle that may bring down several Cabinet ministers.
While the Treasury had released money to compensate locals who would be displaced by the dam, Kenya Forest Service officials have told the DCI that they were never asked to degazette part of the forest at the construction site.
“That means there was never an intention to build the dam,” said Mr Kinoti.
Already, the creditor banks that loaned the country Sh65 billion to build the two dams have written to the Treasury seeking settlement of their demand notes.
It now means Kenya will start paying loans for a project that exists only on paper, or risk the auctioning of its assets abroad by the banks.
It has also emerged that KVDA carried out due diligence after it signed the contract. When investigations started, the MD, Mr David Kimosop, wrote a letter to Attorney-General Kihara Kariuki seeking his concurrence in a letter dated September 17, 2018.
In the letter, Mr Kimosop had explained that KVDA had not done due diligence since “the financiers had set out stringent timelines and there was need to secure funding after consultations with the relevant government authorities”.
He also said that due diligence had been undertaken on CMC di Ravenna after it was given the Itare Dam contract in Molo.
As the local companies that benefited from the money start to spill the beans on what they were asked to do, it appears KVDA could sink with people far and wide.