It’s actually Sh20bn: Rotich negates Ruto on dams scam

Just how much has the government spent on two controversial dam projects in Elgeyo-Marakwet? The answer to that question depends on who between Treasury Cabinet Secretary Henry Rotich and Deputy President William Ruto, you ask,

And who was the Portuguese man who signed on the dotted line for the Italian contractor awarded the Sh63 billion tender for the construction of the Arror and Kimwarer dams? The answer should be simple and straightforward, but not if you talk to the man himself.

ADVERTISMENT

The story of one of Kenya’s most daring rip-offs is quickly developing into a horrible tragicomedy as public officials spin differing yarns. The biggest twist to the plot came Sunday, when Mr Rotich confirmed in an advertisement in a local daily that nearly Sh20 billion has been spent as advance payment to begin building the Arror and Kimwarer dams, contradicting claims by Dr Ruto that only Sh7 billion had been paid out.

Mr Rotich said that up to Sh19.8 billion had been paid to different firms in the two projects on various dates as at the end of last year. The amount is Sh1.2 billion short of the Sh21 billion the Directorate of Criminal Investigations (DCI) is pursuing, and Mr Rotich said the payments were largely fees paid out as part of the conditions to be met before work could begin on the dams.

The Italian firm, CMC di Ravenna, was on December 22, 2017, paid Sh4.3 billion as an advance for the Arror dam, and Sh3.5 billion for Kimwarer on November 6 last year. Both are 15 per cent of the contract sum of Sh28.5 billion for Arror, and Sh23.1 billion for Kimwarer.

The figure for Arror differs slightly (by Sh100 million) from the one provided by KVDA (Sh4.2 billion) in an advertisement last Thursday.

RING-FENCE

Another Sh11.2 billion was paid to SACE Insurance Premium, an Italian government agency, to cover 100 per cent of the principal and interests against any potential financial risks to cushion the lenders, according to Mr Rotich.

The two projects also cost a total of Sh546 million as structuring fee, which is money paid to all those who arranged the financing of the loan. A further Sh360 million was paid as commitment fee, which is the money paid to the lender for committing the loan in order to ring-fence the funds, and the government has also paid Sh3.5 million as annual agency fee to the ead agent acting on behalf of the other lenders.

“The fees are standard in international banking and are paid in all credits acquired by government under export credit arrangements as well as other loans,” Mr Rotich said, noting that the costs and expenses, including advanced payments, were provided for in the dams’ financing agreement.

In an attempt to defend the Treasury from accusations of overseeing a bad deal, Mr Rotich said the payments came from a loan acquired for the dams, and not the Exchequer.

“The role of the National Treasury is confined to mobilising resources to finance government projects,” said Mr Rotich. “For the said dams, the responsible ministry and the Kerio Valley Development Authority (KVDA) forwarded to the National Treasury the projects for funding.”

WITNESS

Last week, the DCI I revealed that National Treasury and KVDA officials were under investigation for paying Sh21 billion for dams that only appear in the fertile imagination of corrupt officials.

“When we asked them for the designs of the dams, they said they were still doing them,” DCI head George Kinoti said on Monday, astounded that Sh21 billion had been spent on a project that had not even been designed.

Detectives have already questioned KVDA Managing Director David Kimosop over the stalled matter. They are also following the trail of Sh4 billion wired to Nairobi from Italy to determine whether it was meant for kickbacks.

But as detectives dug up the dirt, the man listed as having “witnessed” the signing of the Sh63 billion contracts for the Italian firm told the Nation that he could not recall such a deal.

Portuguese national Oscar Costa Cabro is shown to have signed as a witness for the contractor, but when we reached him to confirm his signature he said: “Your statement that I signed the above-mentioned contract is totally false. I have no idea where you got such absurd information.”

Mr Cabro said he was not an employee of CMC Kenya and “never had any involvement” with the dam projects.

“When my mission ended, I returned to Zambia, received a better job offer and left CMC immediately,” he said.

BANKRUPTCY

But when we told him that we had a copy of the contract bearing his signature, he changed tune: “If you say that you have a copy that has my signature as a witness, then it's because the company’s legal representatives asked me to be a witness. I'm not the type of foreigner that comes to Africa and thinks they can do whatever they want and then go away. I have spent most of my professional career in Africa — more than 30 years — and I have a name to protect.”

The Italian firm has already filed for bankruptcy at home, and last week Water Cabinet Secretary Simeon Chelugui admitted it does not have the capacity to finish the Itare dam in Nakuru County.

The new twists and turns in a story that has caught the attention of the country came as Mr Kinoti, the DCI head, told off those trying to politicise investigations into the scandal. Mr Kinoti also said he is preparing to summon a Cabinet minister this week to shed more light into the matter.

Last week, Deputy President William Ruto accused investigators of exaggerating the amount of money lost in the scandal, arguing that the amount in contention was Sh7 billion and not Sh21 billion. Elgeyo-Marakwet Senator Kipchumba Murkomen, in whose county the two projects are located, accused the DCI of “fighting political wars”, saying it was “unfortunate that the project has been weaponised as a tool for 2022 political fights”.

On Sunday, Mr Kinoti hit back, saying he will continue with the investigations unperturbed.

COMPENSATION

“I can’t investigate at the design and style of suspects,” he told the Nation.

Among those under investigation is a company associated with a Cabinet Secretary, after it emerged that it owns some of the parcels of land in Arror lined up for compensation by the National Land Commission.

“If the company is found to be of interest, we will definitely and swiftly descend on them,” said Mr Kinoti.

Mr Kinoti spoke as seven Opposition MPs challenged Dr Ruto to declare his interest in the controversy and demanded that he explain whether he has confidence in the ability of the DCI to carry out its functions.

In a statement to newsrooms, Mr Anthony Oluoch (Mathare), Mr Caleb Amisi (Saboti), Mr Teddy Mwabire (Ganze), Ms Florence Mutua (Busia County), Ms Gladys Wanga (Homa Bay), Mr Godfrey Osotsi (nominated), Mr Jared Okello (Nyando) and the ODM National Treasurer Timothy Bosire said they were “challenging the Deputy President to help Kenyans understand what his interest is in this corruption case that is making him take up the role of spokesman for ministries and contradicting the government position on the matter”.

“Mr Ruto has gone ahead to provide his own version of the amount lost, contradicting the DCI, the agency tasked with investigations in Kenya,” the MPs said.

The legislators rejected claims by the DP that revelations about the grand theft in the dams came from the Opposition, reminding him they emanated from the government he serves.

Also questioning Dr Ruto’s position was Mombasa governor Hassan Joho, who said he was “shocked to hear” the DP’s statement. His remarks were echoed by Likoni MP Mishi Mboko and her Changamwe counterpart, Mr Omar Mwinyi.