The dam scandal that caught Kenya unawares is one that is seen big names in the government get questioned, the contractors of the tender, the issuers as well as the government signers are people that are in the DCI questioning list.
The Deputy President was caught saying that no single cent had been lot in the construction of the dam but new revelation have kept on trickling in showing a whole different side of his sediments
Former Attorney General Githu Muigai has told police that the Treasury headed by CS Henry Rotich ignored his legal advice against signing a deal with CMC di Ravenna to construct the Arror and Kimwarer dams.
Githu was questioned on Friday by DCI investigators over the scandal and confirmed that he had recorded a statement with the Directorate of Criminal Investigations. He declined to elaborate.
Credible sources close to the investigations told the Star that Githu revealed how the National Treasury and the Kerio Valley Development Authority sealed the multi billion shilling deal despite his caution.
Githu told the DCI investigators that he wanted the deal signed only after due diligence had been done on the Italian firm’s financial and legal status.
However, despite the Attorney General’s strong legal opinion, Treasury officials and the KVDA management inked the controversial Sh65 billion deal, exposing the country to possible massive financial losses.
“He did a self-recorded statement as a witness in the matter,” a source speaking on condition of anonymity said.
“They (KVDA and Treasury) were in violation of the advice by the AG,” Githu is reported to have told the investigators.
The ex-AG who resigned on February 13, 2018, after a six-and-a-half years stint at the State Law Office, said due diligence was not conducted on the CMC di Ravenna company before the contract was sealed.
That company has encountered financial problems amid fears that the Kenyan contracts may not be executed. Githu, according to investigators, received a request from the KVDA seeking his legal opinion on the construction of the two dams in March 2017.
In September, KVDA wrote to the AG’s office, saying that they were not in a position to conduct due diligence on the company that was to undertake the construction, yet the contract had already been signed in April 2017.
This was also seven months after the former AG had warned against the signing of the agreement without a due diligence report that would have revealed the financial position of the troubled Italian firm.
Yesterday, DCI chief George Kinoti, in an indirect reference to the former AG’s statement, said investigators were “now a step away from the start of major arrests”.
A source familiar with the investigations told the Star that investigators this week will seek statements from the current AG, Kihara Kariuki, to obtain additional information on further communication between KVDA and the AG’s office.
correspondence being sought by investigators is believed to have taken place since September last year when Githu, months after the ex-AG had left the State Law Office.
Officials from the office of the Solicitor General currently headed by Ken Ogeto are also expected to record statements.Police have indicated that they would also question former Solicitor General Njee Muturi who was in office at the time the controversial deal was signed.
However, it emerged that the DCI is treating these individuals as state witnesses and not suspects in the dams scandal probe.The DCI has since recorded statements from Cabinet Secretaries Henry Rotich (Treasury), Eugene Wamalwa (Devolution) and Mwangi Kiunjuri (Agriculture).
Rotich who was questioned four times, was asked about a wide range of issues, including the possibility that the companies awarded the cash would collapse [and take with them] with public funds.
“We sought to know the safety of the public funds now that the company that was to do the job is facing financial problems,” the investigator said.
Treasury PS Kamau Thugge, who is the accounting officer in the ministry, has also recorded statements with the police.
In a paid advertisement, Rotich said media reports that Sh21 billion had been misappropriated were misleading and damaging to government’s image.
“We would like to stress that all projects whether domestic or externally funded are implemented in strict adherence to the law and in accordance with the commercial and financing agreements,” he said.
“In this particular case, if there were any breaches, the ongoing investigations will capture that.” He said the law had been followed and that [under] the Public Procurement and Disposal Act 2015, the contractor of the projects, Service Assicurativi Del Comercio Estero (SACE) of Italy, was entitled to 15 per cent advance payment.”
Other than the advance payments, Rotich confirmed that the contractor was paid Sh11.1 billion as insurance to guard against any financial risks.Of this, Sh6.1 billion was for Arror dam, while Sh5bn was for Kimwarer dam projects, respectively, both in Elgeyo Maraquet county.
Further, Sh545.9 million was paid to the arrangers of the loan facility from SACE, while Sh359.5 million was paid out as a commitment fee for the lender to ring-fence the loan.
Rotich said Sh3.5 million was also paid out as an agency fee. He stated that the Treasury had approved payment of Sh4.3 billion for the Arror dam as advance payment under the Facility Agreement and the Commercial Contract signed between the Kerio Valley Development Authority and SACE.
The advance payment was meant to facilitate the contractor to move to the site and start implementation of the project. The money was part of the loan facility advanced by SACE and was not from the Exchequer.
Rotich said Kimwarer dam would cost Sh23.1 billion and that Sh3.5 billion was paid in advance.
Also questioned was KVDA chief David Kimosop who was required to present to the police all correspondence and contracts signed with the contractors.
Kiunjuri has also recorded statements with the police. Kiunjuri told investigators that the contracts for the construction of the dams happened long before he was appointed a Cabinet secretary.