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Former Treasury Cabinet Secretary Henry Rotich during an interview in Gigiri, Nairobi, on December 19, 2023.
‘It was all politics and driven by someone who does not understand procurement laws and the role of Treasury Cabinet Secretary (CS),” said former CS Henry Rotich who was acquitted by a Nairobi court last week.
The former CS, who was charged with 19 counts in relation to the Sh63 billion Arror and Kimwarer dams scandal, added that the case was “highly politicised” with obvious plans of making political capital from it.
“The former President (Uhuru Kenyatta) mentioned it in his own backyard, knowing very well that the case was in court. How can you say it was not politicised,” said Mr Rotich.
The former CS described the four years he was dragged in court as a very tragic story. He said the case was investigated in a hurried manner and pushed by someone who did not understand his role in the whole matter.
“I have been in the realm of finance for a while. I know almost every clause that govern the terms of borrowing and the role of the CS in procurement matters,” he said.
Mr Rotich said he acted under statutory powers prescribed by the Public Finance Management (PFM) Act, which states that the CS may raise loans, provided that the terms and conditions of such loans are set out in writing and in accordance with applicable law (Section 49).
The former CS said financing contracts and loan agreement is well stipulated and there was no criminality in entering any of the terms and conditions since section 49 and 53(A)(2) of the PFM Act provides for it.
“The investigators were trying to package a theory that I was involved in the procurement and later on facilitated the financing of the projects. Our laws are very clear. My duty was to ensure that that terms and conditions of the agreements complied with the Treasury requirements,” he said.
Dams projects
Mr Rotich said it was ridiculous for him to be charged over the procurement of entity falling under a different ministry. The project, under the Kerio Valley Development Authority (KVDA), then fell under the Ministry of Environment and Natural Resources and Regional Development Authorities.
He added that it was even more ridiculous that none of the staff of the parent ministry was charged with the infractions.
Central Bank of Kenya deputy governor Dr Susan Koech, then a Permanent Secretary in the said ministry, had been charged alongside him but she was later dropped from the case.
Mr Rotich said he got to know of the two dams projects when the parent ministry wrote to Treasury for his signature.
He said the procuring entity (KVDA) had already identified the financiers and there was nothing unusual in the request.
“I was in Treasury for seven years and before that I was a technical person. There was nothing unusual in the process and obviously the contract was the responsibility of KVDA. But financing is where we get in and after getting the clearance from the Attorney-General, we appended our signature,” he said.
The contracts for the construction of the two dams were signed on April 5, 2017.
“The prosecution was ill-advised from its institution. It is a matter of judicial notice that during the campaigns for the 2022 General Election, rival political coalitions made political capital out of Arror and Kimwarer dams projects, giving a very clear indicium that the prosecution was instituted for the wrong motives,” he said in submissions he filed in court.
Mr Rotich said his role was similar to the one he played in the standard gauge railway project and Konza techno city.
“Just like SGR I signed the agreement with EXIM Bank. Same thing happened with Konza. At what point do you say this is wrong and this is okay?” he posed.
Unicredit Bank AG
The former CS said although the charges were wrong, he took it as a challenge. He said in his long career as a public servant spanning over 25 years, he had never been accused of any wrongdoing or faced any charges in court.
He admitted signing agreements with BNP Paribas Forties S.A./N.V, Itesa Sanpaolo S.P.A., Unicredit S.P.A., and Unicredit Bank AG in April 2017, to finance the construction of the two dams.
Mr Rotich said advance payment — for mobilisation — was made and the contractor moved to the site. He maintained that no money was lost because the loan was guaranteed. “If the contractor does not move to the ground, the money is recalled,” he said.
Mr Rotich said the contractor then acquired some equipment but which were later confiscated by the Directorate of Criminal Investigations (DCI) with obvious plans to criminalise the projects.
Evidence presented in court showed that CMC Di Ravenna- Itinera JV was paid Sh4.3 billion on September 27, 2018 as advance payment for Arror dam and for Kimwarer, an advanced payment of Sh3.5 billion was approved on July 2, 2018.
He said the total amount of loans amounting to US$501,829,818.93 were not paid at once as claimed.
Loan facilities
The total proceeds drawn down from the loan facilities for the two projects between April 18, 2017 and July 22, 2019 amounted to EUR 168,496,863, he said.
He added that the total loan facilities were to be drawn over a period of five years as construction of the dams got underway.
Mr Rotich said by relying on Sections 50(6) and (7) of the PFM Act, the prosecution made an erroneous assumption that all proceeds of a loan must be paid into the consolidated fund. “This was a selective and mischievous reading of the law,” he said.
“If it was planned that someone had to be charged, the story had to be sold,” Mr Rotich said during the interview.
The prosecution had claimed that the insurance policy should have been subjected to competitive bidding.
The ODPP had also accused the former CS of single-sourcing the insurance policy, known as SACE (an Italian export credit agency offering insurance), valued at Sh11 billion, an amount that was inflated by more than 400 per cent.
