DAM SCANDAL

Why Kenya may lose Sh80bn to Italian firm in Kimwarer, Arror case

Former Treasury CS Rotich and his co-accused to answer for breaking the law in procurement processes

In Summary
  • Special prosecutor Taib told chief magistrate Mugambi that they will demonstrate to court how Rotich and his co-accused planned to steal Sh65 billion of public funds.
  • He said Rotich only had authority to secure loans for the government but he went ahead and secured the loans without any competitive process.
Former National Treasury CS Henry Rotich before the Anti-Corruption Court on October 18, 2021.
Former National Treasury CS Henry Rotich before the Anti-Corruption Court on October 18, 2021.
Image: ENOS TECHE

Kenya risks losing more than Sh80 billion to an Italian firm that was contracted to build the Kimwarer and Arror Dams.

This is if an arbitration court rules in their favour.

According to the Director of Public Prosecutions Noordin Haji, the case will be on the head of former Treasury CS Henry Rotich and his co-accused for breaking the law in the procurement.

In his opening remarks during the hearing of the case, special prosecutor Taib Ali Taib said the government risks losing the money to CMC Di Ravenna Itinera Joint Venture.

The value of the project was Sh65 billion.

Taib told chief magistrate Lawrence Mugambi they will demonstrate to the court how Rotich and his co-accused planned to steal Sh65 billion of public funds.

He said Rotich breached the PFM Act, procurement Act and proceeded with the other accused persons to make possible for looting Sh65 billion and yet Sh80 billion is demanded by the contractor at The Hague.

“Your honour, the contractor is seeking the amount even though no dams exist on the ground,” the court heard.

He further said they will prove to the court that Rotich and his co-accused conspired to award the tenders in question to the said company, even though it never existed at the time of award of tenders.

“That at the time agreements were signed to pay them the planned billions of shillings, they were not even registered and did not exist in law at the time," Taib said.

According to the prosecution, they will demonstrate to the court that CMC never bought or acquired any tender documents nor did it submit any tender bidding papers for the construction of the two dams.

“CMC Di Ravenna Itinera Joint Venture was not one of the companies forming record at the opening of the tenders," the court was told. 

The prosecution also claimed the Cabinet only approved construction of one dam, Arror and not Kimwarer, but the accused went ahead to unlawfully flout the tender for both projects.

Taib also said they will prove to court how the said company was included illegally and with impunity into the project.

“It’s a fact that the letter of award of the two projects was issued not to CMC Di Ravenna of Italy or Aecom of SA but to a new company known as CM Di Ravenna of South Africa,” he said.

Taib said, despite the letter being issued to CMC Di Ravenna SA, the contract documents between KVDA and the directors were not signed.

Instead, they were signed by a new company that never participated in the bidding.

“We will demonstrate how Rotich breached the law and secured loans for KVDA to construct the dams even though he didn’t have the legal authority to secure any loans for state corporations,” he said.

Taib said Rotich only had the authority to secure loans for the government but went ahead to do so without any competitive process.

“Your honour, he secured them against the interest of the Republic of Kenya.”

Taib said Rotich proceeded to take the loans from four Italian banks under two agreements that are known as facilities agreements, which he disguised as government-to-government agreements yet they were not.

He added that the Italian government never signed the agreements in question.

The hearing resumes Wednesday.

(edited by Amol Awuor)