The stalled Itare Dam, which is now being investigated by the directorate of criminal investigations, was the subject of a court case before construction started.
A section of elders from the Kipsigis, Luo, Kuria, Abagusii and Ogiek communities were opposed to the project in Nakuru County.
The elders complained that the project would directly affect water supply to their counties and render their lands dry.
They said the dam will result in drying up of seven rivers namely Ndoinet, Songol, Chemosit, Tariganbei, Kipsonoi, Nyongores and Sondu.
They stated that the construction of the dam in the Mau Water Tower Complex will turn the region into a desert in a few years.
The dam is being constructed in Ndoinet and is projected to serve a population of 800,000 people in Kuresoi, Molo, Njoro, Rongai and Nakuru.
According to the elders the matter is of public interest and raises serious environmental issues affecting the nine counties.
Italian firm CMC Ravenna, which won the tender in September 2014 is now said to have gone under.
The fate of the dam now remains uncertain since the company filed for bankruptcy with only 49 per cent of the work done.
Nasa leader Raila Odinga had also opposed construction of the dam, saying his interest is to safeguard people’s lives.
At the time he argued that it would affect flow of water in neighbouring counties of Kisumu, Bomet and Nakuru among others.
He said the Itare dam project would divert several rivers, including Songol, Kipsonoi, Itare Ndoinet, Sise, Itare Kiptiget, Itare Chemosit, Timbilil, Diony Soet, Yurith, Kipchorian, Chemosir and Jamju in Bomet and Kericho counties at the source in the Mau Forest.