DCI to summon 3 more CSs as dams probe widens

Director of Criminal investigations George Kinoti in his office at DCI headquarters during an interview. Photo/Monicah Mwangi
Director of Criminal investigations George Kinoti in his office at DCI headquarters during an interview. Photo/Monicah Mwangi

Director of Criminal Investigations George Kinoti is widening his net as he seeks to find out what happened to the money meant for two unbuilt dams in Rift Valley.

The DCI wants to interrogate Cabinet Secretaries Eugene Wamalwa (Devolution) Simon Chelgui (Water) and Mwangi Kiunjuri (Agriculture) regarding the Kimwarer and Arror dams.

The three are expected to be questioned by investigators at Mazingara house from next week to answer questions relating to the two projects in Elgeyo Marakwet.

Kinoti has also set his sights on officials from the Attorney General and Solicitor General’s chambers who handled the contracts with the Italian Company CMC before the money was paid.

Githu Muigai was the AG when the contract was signed, while Njee Muturi was the Solicitor General

“We are being very meticulous and methodical in this complex investigation and we will not leave out anyone who is involved. All those who handled this transaction will be invited to tell what their role was and what they know,” Kinoti told the Star on Friday.

This past week, Kinoti's team grilled National Treasury CS Henry Rotich for three consecutive days in an investigation that has raised political temperatures. Deputy President William Ruto and his allies dismiss the probe as a witch-hunt.

Yesterday Kinoti and his multi-agency team were busy reviewing Rotich's statements before deciding their next course of action.

Ruto has said the amount under probe is only Sh7 billion, not Sh21 billion as has stated by the DCI.

But yesterday the DCI told politicians not to panic and instead allow his team to complete investigations.

"I'm not interested in politics. All we want are answers to where the money is or how it was spent, by who and whether the law was followed.

They can shout from every corner, in the end, we will present the facts," Kinoti said.

Agriculture CS Kiunjuri and his Water and Sanitation counterpart Chelugui have already distanced themselves and asked investigators to speak to their predecessors.

Wamalwa was the minister for Water and Irrigation from July 2015

to January 26, 2018, when he was handed the Devolution docket.

Kiunjuri, on the other hand, was named Minister for Devolution and planning in 2015 after Anne Waiguru resigned. The Kerio Valley Development Authority, which was the implementing agency for the dams, was under the Devolution ministry at the time.

KVDA managing director David Kimosop signed the Sh64 billion contracts on April 5, 2017.

Chelugui became Cabinet Secretary on January 27 last year and he too has denied any wrongdoing.

The DCI is also planning to summon and interrogate former Principal Secretary James Lopoyetum, and officials at KVDA.

The Italian firm at the centre of the Sh21 billion dams scandal has debts amounting to more than Sh100 billion that it has been unable to service, it has emerged.

Italian firm had debts

The Star has established that CMC di Ravenna, the firm that was awarded the lucrative tenders for the construction of the two dams, has been in a protracted debt crisis, borrowing right left and centre to repay other debts.

Besides the Kimwarer and Arror dams in Elgeyo Marakwet, the firm was also constructing the Itare dam in Kuresoi North subcounty.

The fresh revelations and summonses are likely to put Treasury bosses as well as Kerio Valley Development Authority chiefs in an awkward position as to whether due diligence was done on the Italian firm.

“The CMC consolidated financial reports show persistent problems in terms of indebtedness and liquidity. Since the end of the last decade, the financial debt with banks was quite high. During this decade, the situation has been steadily deteriorating," an Italian Intelligence report states.

Before exiting office, Attorney General Muigai warned Treasury mandarins led by Rotich to ensure that due diligence was undertaken on the controversial firm before execution of any contract.

According to the reports, by 2014 CMC di Ravenna’s debts stood at Sh 64.3 billion but it took an additional Sh30 billion loan that was to last until 2021.

By 2016, the firm’s debts stood at Sh73.3 billion and in 2017, the debts had reached Sh93.5 billion.

By September last year, the firm had accumulated debts amounting to Sh100.6 billion, with only Sh10 billion in liquid assets.

Most of the loans were in the form of unsecured notes which are not backed by any collateral and thus presents more risk to lenders.

This means that the actions of the Italian firm are likely to leave many across the globe in distress.

The firm filed for bankruptcy in a court in Ravenna in December last year, in a clear admission that it cannot pay its debts.

Deputy President Ruto has been on the warpath, rubbishing claims that Sh21 billion had been paid to the contractor.

“You’ve heard that government has lost about Sh21 billion in Kimwarer and Arror dam, which is a flat lie!” he said.

He added, “The money in question is about Sh7 billion and for every coin that has been paid, we have a bank guarantee. No money will be lost because we are a responsible government.”

It’s not clear how the bank guarantee would help with the Italian firm seeking to be declared bankrupt.

The firm is involved in another controversy in Nepal after it abandoned a water construction project.

At some point, police in Nepal arrested eight staffers of the firm, including the project manager, who were fleeing the country, saying they were returning to Italy to celebrate Christmas.