Unserviced Sh5.1B Arror and Kimwarer loan leaves state at risk of lawsuits

The Auditor General’s latest report has disclosed that the Kenyan government defaulted servicing debt over Sh5.11 billion, leaving it exposed to legal suits that may lead to penalties and subsequent loss of public resources.

The evaded payments are for three loans advanced by an international bank towards the construction of three dams; the Arror and Kimwarer multipurpose dams in Elgeyo Marakwet County and Itare dam in Nakuru County.

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The construction of Arror and Kimwarer dams was estimated at Sh63 billion, while Itare dam whose construction was to start in 2016 and end in 2022, was estimated at Sh30 billion.

They were to yield 100,000 cubic metres of water a day and serve over 800,000 people in Molo, Njoro, Rongai, Kuresoi and Nakuru towns.

However, their construction was later halted after the the whistle was blown on irregularities in tendering the mega projects to three international firms; Cooperativa Muratori and Cementisti – CMC Di Ravenna Societa Cooperativa (Italy), Itinera SPA and CMC Di Ravanna – Itinera JV SCPA.

The Directorate of Criminal Investigations (DCI) took up the matter for further probing.

As things stand, the three companies are in court seeking Sh11.4 billion citing a breach of agreement against the government.

They insist that the cancellation was against the law.

The Itare dam project had been awarded to CMC Di Ravenna, but the Italian firm deserted the site and filed bankruptcy proceedings in its home country, even before work on the two projects could start.

This led to President Uhuru Kenyatta forming a technical committee to establish the viability of the Arror and Kimwarer projects.

The technical committee, chaired by Infrastructure Principal Secretary Paul Maringa, presented the report on the findings of the two dams to the President on September 18, 2019, at the state house, Nairobi.

The report’s handover was a public event covered by the media.

But in pure Kenyan fashion, the report disappeared without a trace.

Interestingly, the State House and the ministries of the National Treasury and Water, Sanitation and Irrigation that were critical in the conceptualisation and development of the two projects, do not have a copy of the document.

Parliament has been requesting to have the report tabled in the House for more than a year now.

Regional and Northern Corridor Development Principal Secretary Bellio Kipsang, whose department is tasked with implementing the two projects, recently added mystery to the whereabouts of the report after he claimed he did not have it and that he has never had it.