The Sh50bn white elephant in Bura, Tana River

There are people who think that simply because a project has been funded by the World Bank — and other bilateral donors — it cannot turn out to be scandalous.

When Cord leader Raila Odinga recently raised concern about a World Bank-funded water project, his vote-hunting mischief notwithstanding, some of his critics seemed to suggest that the World Bank had a near-deity persona; always right, always bright.

Let me tell you the story of Bura, first because I don’t think it has been told, and secondly because we never tire from pouring billions of shillings into this white elephant.

We are in what the Bankers magazine called the law of holes and its popular adage: “If you find yourself in a hole, stop digging.”

In 1996, Kenya finally finished paying the World Bank some Sh4 billion it had taken as a loan to settle thousands of families in Bura to farm cotton. In total, about Sh10 billion went into the Bura drain that time, and ever since, the government has been pumping millions of shillings here to hide the shame of yesteryears – hoping that one day, Bura will be revived.

For instance, the Narc government pumped an extra Sh7 billion into the project and in September 2016, President Uhuru Kenyatta announced that an extra Sh7 billion will be set aside to revive Bura (and Hola).

PUBLIC RESOURCES

Bura is a cash-cow — and since inception, it has been a case-study of wastage of public resources and yet, nobody answers for it. So far, it has consumed more than Sh50 billion – and still there is nothing to show.

Mooted to ape Sudan’s 105,000 hectare El Rahad project, Bura is still one of the most scandalous World Bank projects in Kenya. And you only get to know how the figures were inflated by comparing with the Sudan project, done during the same period. In Sudan, the cost of settling one farmer at El Rahad — also a World Bank project — was put at $28,000 while at Bura, our bureaucrats inflated the cost from $28,000  to $55,000. To prepare every hectare, the Kenyans put the actual cost at $42,000 while the Sudan government put theirs at $3,750. By that time a dollar was equivalent to Sh17.

Both these projects were to mimic Sudan’s Gezira Scheme that was originally started by the British in 1925 and distributes water from the Blue Nile through canals and ditches to tenant farms located between Blue and White Nile rivers.

In the World Bank books, the Bura Project was codenamed Credit 722-KE/Loan 1449-KE and it has today become a lesson on how to manage agricultural development in Africa.

IGNORE IT

So embarrassing was the final report that when it was sent to the Kenya government for comment, the President Moi government opted to simply ignore it.

Records show that in June 1977, the World Bank approved a loan of $40 million for an irrigation and settlement project in Bura. The original idea was to settle 5,150 landless families on an irrigated area of 6,700 hectares (about 16,556 acres) in a pilot project that was to inform future schemes in Kenya.

Although we still put more money into it, initial assessment indicated that the soils in Bura “were only marginally suitable for irrigation” and one needs to look again at the report prepared by Netherlands consultancy, Ilaco, in 1977. 

Even when the World Bank was financing this project, they had known that there was controversy on the soil suitability – and it was only after the collapse of Bura that it would write “irrigation difficulties have been reported on the shallow soils … As levelling became difficult, irrigation had to be done on a steeper slope than was assumed … this plus the limited infiltration on shallow soils, has made irrigation in long furrows inefficient on much of the land.”

HARUN LEMPAKA

Run by the National Irrigation Board, then under Mr Harun Lempaka, it is now known that when these matters were first raised, the bureaucrats ignored them.  Concern was raised early enough on why the government was spending US$28,000 per settler and whether it had the capacity to absorb the recurring subsidies. Nobody seemed to answer these questions and because of that one of the co-financiers, Commonwealth Development Corporation (now CDC Group), pulled out. The World Bank stayed on — funding a moribund projected doomed to fail — and watched as new settlers were duped to start a new life in an experiment that was destined to nowhere.

At first, the initial plan was to fund for a diversion of Tana River to pass through a 46 km supply canal plus other irrigation canals that would have seen the water flow by gravity. A new town was to be built together with 23 villages built for the new settlers, equipped with water, electricity, an airfield, educational and health facilities. In total, the entire project would have supported about 65,000 people — and together with the infrastructure, the extension and research facilities, Bura was to consume US$98.4 million (almost Sh10 billion at current rates), all borrowed from different donors.

STARTED SCHEME

The ministry of Agriculture, then under Jeremiah Nyagah, started the scheme with little technical expertise on the ground and procurement turned into a nightmare for the National Irrigation Board which had never managed such a project.

Bura was large. It was equal in size to all the other irrigation projects in Kenya and then, as the World Bank would later admit in an internal report, “it had problematic soils”. Why the project was entrusted to a rookie National Irrigation Board, which had no previous record in managing an irrigation project, is not clear from records.

It is now known that when a World Bank appraisal team visited Kenya in 1975 and again in 1976, it classified Bura as a “potential difficult and contentious project”.  They also found that the soils were not good for irrigation and there was a row between the Netherlands and World Bank over the dismissal of Ilaco’s consultancy and hiring of the British-based consortium, Sir M MacDonald and Partners, in December 1976.

Farmers were given false promises and duped that they would earn US$850 (about Sh85,000 today) a year. It was a reckless lie for farmers who had never had irrigation experience before and where extension services were lacking.

ENOUGH WATER

And was there enough water downstream Tana River to carry out such a project? Water hydrologists later doubted whether any feasibility studies took place since there was little data on the river flow and the data available was collected before the damming of Tana River for the Seven Forks hydro-power schemes, another World Bank project. Thus, the entire project had relied on obsolete data and this was realised later on — or those who knew never cared.

The World Bank also brought in its own “experts” and “consultants” to help with the project. The first mistake happened after the consultant decided that in order to justify the high costs of river diversion and canal construction, Kenya should plan for a large scale project. As a result, focus on the smaller Bura project evaporated and, as infrastructure for an expanded project consumed all the money set, it was decided that the flow of water by gravity should be postponed.

Why the World Bank accepted this proposal is not clear and why the technocrats opted for pumping of water has never been explained.

As the costs overshot by 65 per cent, the donors wrote to George Saitoti, the new Minister for Finance, asking the Treasury whether this project should be abandoned.  Saitoti wrote back saying the government would seek more financing.

REDUCED SCALE

Although it was said then that the pumping was for the reduced scale of the project and was supposed to be temporary; it actually allowed those running the scheme a chance to drain more money out of Treasury and became a permanent feature.

Bura had no trained operators of the pump unit and that caused frequent breakdowns and water supply failures. As a result, water availability at the farms depended on whether the pump was working and on the availability of the agricultural machinery sent there.

Because of the kickbacks – and the usual inflated prices – the cost of settling one settler was raised from the original US$28,000 to US$55,000. Even after using that money, the farmers were to rely on government subsidies estimated to cost US$3,500 a farmer per year or US$18 million per year, equivalent to more than 70 per cent of the rural budget then.

As a result, the World Bank later noted that Bura was not going to be financially viable simply because the Moi government had refused to listen to the misgivings raised by even the National Irrigation Board.

WRONG DESIGN

By 1984, it became clear that Bura’s design was wrong. The consultants, as World Bank later admitted, had “excluded certain costs” and “the economic rate of return had declined to no more than 4 per cent.” What this meant was that Bura was a white elephant – unless something was done.

Three options were on the table. One was to go back to the original design, which did not factor in a huge project. This option was rejected by the donors fearing it would “cause delays”. The second option was to cut the project costs by postponing river diversion, reduce the staff housing and road programmes. The expected aid that Saitoti had talked off from Kuwait and Finland did not materialise and that meant that Kenya’s contribution to the project increased from 20 per cent to 50 per cent. What it also meant was that the consultants took a huge chunk of the money given as aid! It also meant, and the World Bank admitted as much, that by 1985 some 25  per cent of the total public investment in agriculture was going to Bura.

By 1982, some 200 farmers had died of malaria and in that year about 25 per cent of the settlers left Bura. By 1984, malnutrition and diarrhoea became a constant menace at the project according to records due to lack of adequate water.

SIX MONTHS

Also, there was no one to manage the irrigation system put in place and a consultant hired in 1979 only lasted six months before he was dismissed which, according to a World Bank report, led to “poor maintenance of civil works and equipment”.

The other problem was that all procurement decisions “even for the day-to-day supplies” were made in Nairobi “where the NIB had neither the staff nor the sense of urgency to attend to so many requests for spare parts, farm inputs, fuel, casual labour and the like.”

Then amidst all that, the world prices of the 1985 cotton started falling at a time when Kenya recorded its best bumper harvest (until to date) of 70,000 bales. The Cotton Board also delayed paying farmers and allowed mitumba traders to thrive. That not only killed cotton farming but also the local industries.

The World Bank had written to Simeon Nyachae, then Chief Secretary, asking for an “institutional structure” to run Bura. On April 2, 1986, Mr Nyachae said they would put up a new management but did not address the issue of autonomy.

As the World Bank walked away after having got its money back, it wrote a critical report that dismissed the project as a failure – saying “the future is bleak” and that “the scheme will require heavy government subsidies throughout its life”.

Thirty years later, Bura still has no autonomy and the experiment continues. Those who got stuck in Bura hardly know what happened.

At times, even donors get things wrong. We are in a hole in Bura, but we can’t stop digging.

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@Johnkamau1