THE Public Accounts Committee has cleared audit queries on the stalled Itare, Arror and
Kimwarer dams, despite concerns
Kenyans could lose more than Sh30
billion in the botched projects.
Auditor General Nancy Gathungu
had flagged the loans, noting her office could not verify repayment terms
or confirm if the loans were lawfully
terminated.
This was after the government defaulted on Sh11 billion,
risking legal penalties.
Gathungu also questioned whether
the correct steps were taken to restructure the debt before repayment
to the Italian lenders resumed.
However, in its report, the National
Assembly’s PAC accepted Treasury
PS Chris Kiptoo’s explanation that
the loans were properly restructured.
“The committee has noted the submission by the accounting officer and
found the matter was resolved,” the
report reads.
MPs in plenary would, however,
have the final say on the query when
the report is subjected to debate for
final approval.
In his submission, the PS had told
the committee the resumption of
payments previously halted in 2020
followed a Cabinet approval in April
2024.
Under the new agreements signed in
June 2024, Kenya will now pay more
than Sh30 billion (Sh31,475,529,447)
for dams that remain incomplete.
Nakuru county’s Itare dam was
abandoned after just 25 per cent progress and no work has been done on
Arror and Kimwarer sites.
Former Public Service CS Justin
Muturi recently quipped he refused
to endorse the dam deals.
“The country has lost more than
Sh38 billion. I couldn’t append my
signature as attorney general. I have
a paper trail on these, in soft copy,”
Muturi claimed.
“I wondered why because the country was losing money on the project.
They wanted me to sign and I declined."
Despite PAC’s clearance, Gathungu
maintains that the Treasury failed to
provide restructuring documents.
In the latest review of the loans
question, the auditor general has cast
doubt on the legitimacy of the Sh31.4
billion debt and value for money on
the same.
Originally, the projects were to
be funded through Italian government-backed financing, but the deals
shifted to costlier commercial loans.
Meanwhile, legal cases against individuals linked to the scandal have
collapsed, with all accused persons
acquitted as of December 2023.
Treasury PS Kiptoo told PAC that the
government and the lender, Intesa
San Paolo, negotiated and agreed on
a financial settlement.
The negotiated financing agreements for Itare, Arror and Kimwarer
dams saw Kenyans pay more than
Sh30 billion.
Ruto held meetings with the Italian
Prime Minister Giorgia Meloni where the outstanding loans featured prominently.
The President said in January
2024 the projects would resume.
In the latest audit query, Gathungu
says her office could not confirm the
legitimacy of the restructured loans.
She cited frustrations with getting
copies of the agreements to ascertain
if there would be value for money for
the citizenry.
The report for the year to June
30, 2024, the auditor general stated she was not furnished with the documents.
“In the circumstances, the authenticity of the outstanding balance after restructuring
and value for money for the projects
of Sh31,475,529,447 could not be
confirmed,” the report reads.
Before the restructuring, Kenyans
were to pay Sh62 billion for the aborted dams following the termination of
the contract.
Treasury asserts that the letter had
issued letters communicating that it
had terminated the credit as initially
stated.
PS Kiptoo said the transaction files
containing credit agreements for the
dams were taken by the DCI and have
remained in their custody since the
probe began.
