What you need to know:
The CS maintains advance payment is a procedure in nearly all commercial and financial agreements.
Italian firm is accused of bribing Kenyan officials but is yet to release comprehensive statement.
Deputy President William Ruto also took the same position as he accused the press and investigators of exaggerating the figures.
Weeks after the dams scandal broke out, the Italian firm at the centre of the controversy is yet to issue a detailed public statement about the allegations, even as various parties adversely mentioned sought to clear their names.
On Saturday, embattled National Treasury Cabinet Secretary Henry Rotich defended his decision to pay the Italian company a down payment of more than Sh7 billion before it even began work on two dam projects in the Rift Valley. The firm is at the centre of bribery allegations.
Mr Rotich maintained that the two projects in Elgeyo Marakwet County being undertaken by the cash-strapped CMC di Ravenna are above board.
“Treasury cannot wake up one day in the morning and start paying for things that they have not been asked to pay,” the CS said in an exclusive interview with the Sunday Nation.
Mr Rotich’s statement puts him at loggerheads with Directorate of Criminal Investigations (DCI) boss George Kinoti who alleges that up to Sh21 billion could have been lost in the Arror and Kimwarer multi-purpose dam projects.
“Advance payment is a procedure in virtually all commercial and financial agreements and it is provided for in the Public Procurement and Disposal Act, 2015,” said Mr Rotich.
Lawyer Ahmednassir Abdullahi, who acted for the Italians, said although he does not have a copy of the brief statement the officials wrote at the DCI three weeks ago, his clients denied giving bribes and said they could account for the money they received.
“It was a very brief statement, about one or two pages” Mr Abdullahi said on Friday.
Getting the co-operation of the Italian firm is crucial for the case that Mr Kinoti is trying to build against Kenyan officials who are suspected to have pocketed unknown amounts in kickbacks from the company.
Mr Kinoti had earlier this week said Sh4 billion out of the Sh6.3 billion that the Treasury wired to the company’s bank account in Milan in December 2017 as part of 10 per cent down payment was re-routed to a bank in London and then to a bank in Kenya where the money was allegedly withdrawn in US dollars from a bank in Westlands.
It is for this reason that the financially troubled firm has been unable to start work on the Arror and Kimwarer dams more than a year down the line, said Mr Kinoti.
However, Mr Abdullahi said his client is only waiting for the government to complete compensating people who own land in the sites before starting work.
“My client is finishing up on the designs and mobilising equipment as he awaits for the land compensation process to end. They are expected to break ground on the two projects in April,” he said.
However, the ability of the firm to undertake the two projects has been thrown into serious doubt after the firm filed for bankruptcy in an Italian court last year.
In the case of Itare dam which the company is constructing in Nakuru County, Water and Sanitation Cabinet Secretary Simon Chelugui said the ministry has given the Italian firm until next Friday to present a comprehensive proposal on how it intends to complete the project.
“We will know the way forward thereafter,” the CS said on Saturday.
Should the DCI get concrete evidence that CMC di Ravenna paid a bribe, it will severely affect its ability to successfully bid for projects around the world, especially in Europe and North America where stringent anti-bribery laws prevail.
The company is also being investigated for corruption allegations in South Africa and was heavily criticised by authorities in Uganda on how it clinched a tender to build a superhighway from Kampala last year.
Besides Itare, Arror and Kimwarer dams, the company also won tenders to construct Radat dam in Marigat, Baringo County, at a cost of Sh20 billion, and Kithinu dam in Nkubu, Meru County, at a cost of Sh26 billion.
However, the last two projects are yet to take off for lack of finances.
Last week, more than 100 firms that have allegedly done business in the two projects were ordered to record statements with the DCI where it emerged that some of them had allegedly supplied items that are not remotely related to dam construction, such as pillows, towels and kitchenware.
Mr Mugo Kibati, who was among those summoned by the DCI as the CEO and board member of Sanlam General Insurance Ltd, which was allegedly paid Sh47 million by CMC di Ravenna, distanced himself from the probe.
“Contrary to reports published in a section of the media recently linking me to the Sanlam and Kerio Valley Development Authority bid bond issue, I would like to categorically clarify that by the time the transaction was being discussed and concluded, I had already resigned from Sanlam as CEO and member of the Sanlam board,” said Mr Kibati, who is now the CEO of Telkom Kenya.
Whereas the DCI boss Mr Kinoti maintained that the firm had been paid Sh21 billion for the two projects in question, the National Treasury and the Kerio Valley Development Authority (KVDA), which is the implementing authority, released press statements claiming that the amount in question is Sh7 billion.
Deputy President William Ruto also took the same position as he accused the press and investigators of exaggerating the figures so as to paint the government in bad light and ultimately scuttle the two projects in his political backyard.
“You have heard that the government has lost about Sh21 billion which is a flat lie!” Dr Ruto said on Thursday. “The money in question is about Sh7 billion, and for every coin that has been paid, we have a bank guarantee."
Dr Ruto’s sentiments drew immediate condemnation from former Prime Minister Raila Odinga who said "the Sh7 billion they are saying is not pocket change.”
“Hii sio pesa ya kununua mandazi. (This is not money to buy snacks),” he said on Thursday when he spoke at a funeral in Murang’a County which was also attended by President Uhuru Kenyatta.
Yesterday, Soy MP Caleb Kositany said the approach being used by the investigating agencies was hurting the image of the country.
“The war on corruption cannot be won through screaming newspaper headlines,” he said.
“A serious investigator does not shout what he is doing; he lets his results work for him. The other day they told us NYS lost Sh9 billion but only presented a case of 400 million,” he said.
Additional reporting by Wanjohi Githae