An audit report has revealed that the Cabinet did not approve the Sh22.5 billion Kimwarer dam project amid a scandal that has so far seen suspended Treasury Cabinet Secretary Henry Rotich and PS Kamau Thuge arraigned on suspicion of financial misconduct.
Auditor-General Edward Ouko, in his report for the financial year ended June 2018, says that while the Cabinet approved the Arror dam project in a memo in 2008, it did not approve Kimwarer.
“According to the memorandum of December 3, 2008, the Cabinet approved development of the Arror Integrated Multi-Purpose Project,” Mr Ouko says.
“There was no evidence to show that the Kimwarer multipurpose project was approved by the Cabinet.”
Mr Ouko also faults the Kerio Valley Development Authority (KVDA) over the project approval and tendering process, pointing out that it did not issue a notice of expression of interest and began the procurement by asking interested bidders to submit proposals.
The audit report also indicates that the project was not included in the annual procurement plan for the year ended June 30, 2018, contrary to section 43 (3) of Public Procurement and Asset Disposal Act, 2015.
The law states that “all procurement processes shall be within the approved budget of the procuring entity and shall be planned by the procuring entity concerned through an annual procurement plan”.
Mr Ouko further says that although the management indicated that the tendering process was informed by the Cabinet approval, the memo that was available for audit review indicates that only Arror was approved.
“Therefore, Kimwarer dam was not approved by the Cabinet. Consequently, the management breached the law,” Mr Ouko says in the report.
The audit report tabled by National Assembly majority leader Aden Duale on Tuesday also faults KVDA for ignoring the Attorney-General’s advice to establish the capacity and capability of Italian firm CMC di Ravenna to undertake a project of that magnitude.
The firm, which at one time faced voluntary liquidation in Italy, was awarded the multi-billion project without draft technical designs and crucial documents required before a contract is issued.
Mr Ouko further faults the KVDA for failing to complete the process of acquiring land for the project 22 months after the contract was signed.
It is not known when the process will be completed.
“Further, there is no evidence that the total amount required for land acquisition and compensation has been factored into the 2018/19 budget to enable the authority to acquire land for resettlement and compensation of land owners,” the report says.
“The authority may not be completed within the contract period and the authority is likely to incur huge cost overruns arising from delay in handing over the project.”
According to the contract, Kenya was to give an additional Sh 7.7 billion to meet local costs of resettlement, compensation, project management and any others not covered by donors.
Mr Ouko says in his report that Treasury has only released Sh643,200,000 for the Arror project, Sh8,634,135 of which has been spent on public participation and sensitisation.
He also notes that Treasury is yet to release a shilling for Kimwarer’s counter-funding.
In July, Director of Public Prosecution Noordin Haji ordered the arrest of 28 top government and agency officials over the multibillion-shilling Arror and Kimwarer dams scandal.
Among those arrested and arraigned alongside Mr Rotich and Mr Thugge are former KVDA Managing Director David Kimosop and East African Community Principal Secretary Susan Jemutai.