Details emerge over cancellation of Kimwarer dam project

Thursday, December 5th, 2019 18:54 |

The multi-billion-shilling Kimwarer dam saga that saw the arrest and prosecution of Treasury Cabinet Secretary Henry Rotich and Principal Secretary Kamau Thugge, has resurfaced with the Auditor General Edward Ouko saying the project was never approved by the Cabinet.

In a report tabled in the National Assembly yesterday, Ouko  said while the Cabinet approved Arror dam project, there was no documentary evidence to show the Kimwarer project was sanctioned.

According to records,  Kerio Valley Development Authority (KVDA) entered into commercial contracts for Arror and Kimwarer multipurpose dams projects with Italian firm CMC Di Ravena at Sh28 billion and Sh22 billion, respectively.

Issue notice 

“Although the management indicates that the tendering process was informed by the Cabinet approval, the Cabinet memo available for audit review indicates that only Arror was approved by the Cabinet. Therefore, Kimwarer was not approved by the Cabinet,” reads the report.

But despite the approval of Arror dam, Ouko raised concerns that KVDA did not issue a notice for Expression of Interest for the construction of the two dams and instead began the procurement with invitation for interested bidders to submit request for proposals (RFP).

Further, the Auditor General said the project was not included in the annual procurement for the year ended June 2018 contrary to provisions of the Public Procurement and Disposal Act that states that all procurement processes should be within the approved budget of the procuring entity and shall be planned by the procuring entity concerned through an annual procurement plan.

Hand over site

In the report tabled by Leader of Majority Aden Duale, Ouko also raised concern that the two projects may not be completed after it emerged that KVDA had not handed over the site to the Italian firm after it failed to secure Sh7.7 billion to compensate residents displaced by the two projects as the National Treasury only released Sh643.2million

The Sh7.7billion was expected to meet the costs of resettlement, compensation, project management and any other costs not covered by donor facilities.

Of the Sh643.2 million, Sh8 million was spent on public participation and sensitisation on the project as of June, last year.

The report showed that KVDA signed contracts with the contractor for the two projects on April 5, 2017 while the financing agreement was signed on April 18 of same year.

Provide evidence

General conditions of the contract required the authority to hand over right of access and possession of the site to the firm for the commencement of the constructions but the management has never provided documentary evidence of any formal site handover.

“The management is in breach of the contract agreement and this may result in delay in completion of the project within the contract period. In addition, the management did not provide revised contract period,” says the report.

According to Ouko, although KVDA did due diligence on the said firm as per the Attorney General’s directive, there was no evidence to show key parameters such as current ratio, debt ratio, and debt equity ratio were considered in the financial evaluation exercise.

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