The story of one of Kenya’s most daring rip-offs is quickly developing into a horrible tragicomedy as public officials spin differing yarns. The biggest twist to the plot came Sunday, when Mr Rotich confirmed in an advertisement in a local daily that nearly Sh20 billion has been spent as advance payment to begin building the Arror and Kimwarer dams, contradicting claims by Dr William Ruto that only Sh7 billion had been paid out.
Mr Rotich said that up to Sh19.8 billion had been paid to different firms in the two projects on various dates as at the end of last year.
The amount is Sh1.2 billion short of the Sh21 billion the Directorate of Criminal Investigations (DCI) is pursuing, and Mr Rotich said the payments were largely fees paid out as part of the conditions to be met before work could begin on the dams.
The Italian firm, CMC di Ravenna, was on December 22, 2017, paid Sh4.3 billion as an advance for the Arror dam, and Sh3.5 billion for Kimwarer on November 6 last year. Both are 15 per cent of the contract sum of Sh28.5 billion for Arror, and Sh23.1 billion for Kimwarer.
The figure for Arror differs slightly (by Sh100 million) from the one provided by KVDA (Sh4.2 billion) in an advertisement last Thursday.
Another Sh11.2 billion was paid to SACE Insurance Premium, an Italian government agency, to cover 100 per cent of the principal and interests against any potential financial risks to cushion the lenders, according to Mr Rotich.
The two projects also cost a total of Sh546 million as structuring fee, which is money paid to all those who arranged the financing of the loan. A further Sh360 million was paid as commitment fee, which is the money paid to the lender for committing the loan in order to ring-fence the funds, and the government has also paid Sh3.5 million as annual agency fee to the ead agent acting on behalf of the other lenders.
“The fees are standard in international banking and are paid in all credits acquired by government under export credit arrangements as well as other loans,” Mr Rotich said, noting that the costs and expenses, including advanced payments, were provided for in the dams’ financing agreement.
In an attempt to defend the Treasury from accusations of overseeing a bad deal, Mr Rotich said the payments came from a loan acquired for the dams, and not the Exchequer.
“The role of the National Treasury is confined to mobilising resources to finance government projects,” said Mr Rotich. “For the said dams, the responsible ministry and the Kerio Valley Development Authority (KVDA) forwarded to the National Treasury the projects for funding.”
Last week, the DCI revealed that National Treasury and KVDA officials were under investigation for paying Sh21 billion for dams that only appear in the fertile imagination of corrupt officials.
“When we asked them for the designs of the dams, they said they were still doing them,” DCI head George Kinoti said on Monday, astounded that Sh21 billion had been spent on a project that had not even been designed.
Detectives have already questioned KVDA Managing Director David Kimosop over the stalled matter. They are also following the trail of Sh4 billion wired to Nairobi from Italy to determine whether it was meant for kickbacks.
But as detectives dug up the dirt, the man listed as having “witnessed” the signing of the Sh63 billion contracts for the Italian firm told the Nation that he could not recall such a deal.