PS quizzed over ‘missing’ report on Kiwarer, Arror dam projects.
Mystery has swirled around the report of a technical committee formed by President Kenyatta to establish the viability of the Sh50 billion Kimwarer and Arror multipurpose dams.
The team chaired by Infrastructure Principal Secretary Prof Paul Maringa handed the report on the findings of the two dams to the President on September 18, 2019 at State House.
But it has now emerged that State House, the Treasury and the Ministry of Water, Sanitation and Irrigation, which were critical in the development of the two projects, don’t have access to the document.
MPs have been pushing for the report for more than a year. Regional and Northern Corridor Development Principal Secretary Belio Kipsang, whose department is in charge of the projects, has never seen it.
Dr Kipsang made the revelations at a meeting of the Public Accounts Committee (PAC) of the National Assembly last week, which begs the question: Where is the report?
In a press release to the media at State House, the technical committee had recommended the cancellation of the two projects on account that they were overpriced. It said Kimwarer dam, which was to cost taxpayers Sh22.2 billion, was not viable.
It, however, recommended that the Sh28.3 billion Arror dam should progress at a cost of Sh15 billion. At the time, the government had already pumped in Sh7.5 billion in two separate advance payment guarantees.
Dr Kipsang said the advance payment guarantees to the contractor were financed by a commercial loan from a bank in Sao Paulo, Brazil. This was the first time a Brazilian bank was being linked to the two projects.
What the PS could not tell the committee was whether the amount was paid directly to CMC Di Ravenna, an Italian company that was contracted to construct the two dams.
Interestingly, the Italian firm filed for bankruptcy even before work on the two projects could start, but was not declared bankrupt.
Dr Kipsang told the committee that by the time CMC Di Ravenna was filing for bankruptcy, Sh4.1 billion had been paid to Heritage Insurance Company as security guarantee for the Arror dam and Sh3.4 billion to Standard Chartered insurance company for Kimwarer.
The committee demanded that the PS furnishes it with the names of directors of the two local insurance companies.
Dr Kipsang told the MPs that he wrote to Head of Public Service Joseph Kinyua asking a copy of the report. “The head of public service indicated to me that the report was not with him. That the report was with the Ministry of Water,” he told the committee.
“I wrote to the PS, Ministry of Water. The PS did not respond but when I met him, he told me he did not have the report,” he added.
PAC chairman Opiyo Wandayi (Ugunja) observed: “You are taking us round in circles. So, how does government work? A task force is set up by the President. It puts together a report, hands it over to him in the full glare of cameras. But now we can’t lay our hands on that report.”
Documents presented to Parliament show that Dr Kipsang first sought the report on September 17 last year. “The National Treasury requested the state department to share the report by the technical committee so as to share it with PAC,” the PS said in the letter to Dr Kinyua.
On September 14 last year, PAC had demanded that the State Department for Planning and Statistics, under the National Treasury headed by Principal Secretary Saitoti Torome, share the report.
Mr Torome had no choice but to contact Dr Kipsang for compliance purposes, but the latter was helpless.
“The purpose of this letter, therefore, is to inform you that the report has not been shared with the ministry and request you to facilitate the report to be shared with the state department before September 22, 2021,” Dr Kipsang pleaded with Dr Kinyua.
He argued that he wanted the report so as to enable the ministry to prepare for a meeting with PAC on audit issues and also share the same with the State Department for Planning.
But on October 15 last year, Dr Kinyua told Dr Kipsang that the custody of the report would be with the Ministry of Water.
“The purpose of this letter is therefore, to request that you direct the request referenced here-above to the Ministry of Water, Sanitation and Irrigation for action,” Dr Kinyua stated in the letter.
The Head of Public Service went ahead to advise Dr Kipsang that in the event that there is difficulty in processing “your request by the said ministry, you may seek the intervention of this office.”
On November 2 last year, Dr Kipsang wrote to his counterpart at the Ministry of Water, Mr Joseph Irungu.
“The ministry requested access to this report through the Head of Public Service, who directed the ministry to redirect its request to the Ministry of Water to act on the request,” he stated. Mr Irungu did not to respond.
But when questioned by Mr Wandayi and Garissa Township MP Aden Duale why he had not gone back as advised by Dr Kinyua in case he faced difficulties accessing the report, Dr Kipsang was lost for words.
His explanation that he needed an official response from Mr Irungu so that he could officially act on it as reference material to Dr Kinyua, was dismissed as “casual.”
“Can you go back to him (Dr Kinyua) and tell him that you have not gotten the report. That report ought to have been tabled in the House. Kinyua told you to look for him, so do as advised and give us the report on Monday,” said Mr Duale.
Mr Wandayi warned the PS that he risked being indicted if the report was not availed to Parliament.
“This committee is taking great exception to the fact that it is unable to get a report from you, a report which is in the public domain despite several reminders. Once this committee directs that you produce a report or any other documentation then you have to do it,” he said.
“We can take steps to indict you or anybody else whom we feel is obstructing the operations of this committee and by extension the National Assembly even before we do our report,” he added.
Dr Kipsang undertook to have the report brought to the House.
“I take a commitment to engage the head of civil service. I took a route, which I thought was the right one. But now I can go back to him (Dr Kinyua) because my colleague has not given me the report,” he said.
The PS further told the committee that the government has recalled the Sh4.1 billion advance guarantee payment to Arror dam after it expired on December 31 last year, even before the work could be done.
But the PS noted that he had no evidence that the amount had hit the National Treasury accounts at the Central Bank of Kenya (CBK). The Sh3.4 billion advance guarantee payment for Kimwarer is set to expire on June 30, 2023.
“At that time we shall also recall the guarantee and therefore, safeguard the interests of the taxpayer as required by law,” said the PS.
Despite filing for bankruptcy, CMC Di Ravenna sued Kenya at the international court of arbitration for irregularly cancelling the contracts for the two projects.
Rarieda MP Otiende Amollo wondered how the company could sue the country yet it had filed for bankruptcy proceedings. “This is the conundrum we are in. Legally, if you have sought to be declared bankrupt or you have been declared so, you have no capacity to sue,” he said.
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