Senators query undeclared Sh3bn Galana Kulalu funds

Former CS Rotich signed the loan deal with an Israeli bank; project done by an Israeli contractor

In Summary

• The feasibility study suspected to have been conducted by a firm affiliated to the Israeli contractor Green Arava. 

• Committee says taxpayers could have lost money in forex revenues by virtue of the loans being utilised at the source. 

Galana Kulalu food security project
VISION 2030 FLAGSHIP PROJECT: Galana Kulalu food security project

Senators want answers from the National Treasury on undeclared Sh3 billion, which was part of the funds sourced for the Galana Kulalu project.

Former CS Henry Rotich signed a credit loan agreement of Sh6.06 billion with Bank Leumi Le-Israel BM while the government co-funded the same at an additional Sh5.7 billion. 

This brought the total funding to Sh11 billion of which Sh8.2 billion has been incurred in the project implemented by the National Irrigation Board. 

Members of the Agriculture committee further want an explanation on the circumstances under which the scope of works was reduced from Sh14 billion to Sh7.2 billion. 

The committee chaired by Embu Senator Njeru Ndwiga further raised queries on why the government allowed the lender to administer the funds at the source. 

This followed concerns that the works being claimed for are already in excess of the total project cost. 

The legislators further poked holes in the direct procurement of the contractor–Green Arava, citing risks in the face of revelations the feasibility study was conducted by a firm affiliated to the Israeli contractor. 

“We must call out this procurement incest. Many people have raised issues about the way this project was implemented,” Ndwiga said.

Of the money from the Israeli bank, Sh5.3 billion was to finance the contract price for the construction works while Sh701 million was insurance premium.

Ndwiga’s committee said there was a possibility taxpayers could have lost forex revenues by virtue of the loans being utilised at the source. 

“There is a great risk that the firm that conducted the feasibility study is a subsidiary of the contractor. In the face of this, there cannot be any objectivity on their part,” Ndwiga said.

Senators Moses Kajwang’ (Homa Bay), Juma Wario (Tana River) and Naomi Shionga (nominated) said administrative action should be taken against those behind the irregularities.

The team demanded a technical audit of the project to ascertain whether taxpayers got value for money in the Vision 2030 flagship project.

Wario called for deeper engagement of locals amid concerns they are yet to benefit from the multibillion-shilling venture. 

The committee was meeting with auditors from the Office of the Auditor-General following its earlier request for a review of the agricultural enterprise.

The auditors said they found out the amended project cost followed a decision by an inter-ministerial committee comprising Cabinet Secretaries for Agriculture, National Treasury and Transport.

“The minutes of the meeting where the variation of the contract was approved were, however, not made available for audit verification,” an OAG official said.

The auditors recommended that a national irrigation policy be crafted to clearly define the roles of the county and national governments to instil ownership of the project. 

The Auditor-General also wants investigations on whether there was impropriety by the actors for immediate action to be taken. 

Edited by R.Wamochie