Italian firm linked to dams' scandal seeking Sh80b, court told

An Italian firm linked to the Arror and Kimwarer dams scandal is demanding Sh80 billion compensation, it has emerged.

The Director of Public Prosecutions has warned that the Italian company contracted to construct the two dams has moved to the International Court of Arbitration seeking compensation for the failed project.

This emerged during the first day of trial of former Treasury Cabinet Secretary Henry Rotich, when special prosecutor Taib Ali Taib laid bare the conspiracy that led to the loss of Sh63 billion in the Arror and Kimwarer dams scandal.

"As a result of the accused's actions, the Italian company has filed a case at the International Court of Arbitration at The Hague seeking Sh80 billion compensation from the government even though they did not construct any dam," said Taib.

Taib, in his opening statement, painted an intricate web of well-planned scheme to defraud public funds and how the government is at risk of losing another Sh80 billion to the Italian company that was contracted to build the two dams.

“It is a case where we will demonstrate the corruption ailing our country. We will lay bare the skeletons of the accused persons who are not ordinary Kenyans but elite members of society who walked the corridors of power and used the positions to epitomise corruption,” said Taib.

Rotich is facing trial alongside former Chief Economist Kennedy Nyakundi, former Kerio Valley Development Authority (KVDA) boss David Kimosop and former National Environment Management Authority (NEMA) Managing Director Geoffrey Wahungu.

Others are Jackson Kinyanjui, William Kipkemboi, Paul Kipkoech, Francis Chepkonga and Titus Muriithi.

The suspects were first charged in July 2019. The charges have been amended several times and the accused persons dropped from the initial 24 to the current nine.

They are facing a total of 30 counts in which the prosecution claim they conspired to defraud the government Sh63 billion by entering into a contract for construction of the Arror and Kimwarer Multi-purpose dams without approval.

According to Taib, the conspiracy to defraud the government started when the Cabinet only approved one project to construct the Arror Dam but that the accused persons illegally entered into a contract for the Kimwarer Dam without any approval.

Taib told the court that investigations revealed the Italian company was a ‘ghost’ entity and did not exist at the time it was awarded the multi-billion shillings contract and that it did not feature anywhere in the tender bid documents.

He added that they will demonstrate how the loans procured for the two dams were highly inflated and that the former CS procured illegal high insurance premiums for the company which resulted to loss of public funds.

“We will prove that Rotich and his co-accused gave in to the corrupting influence of power, looted our coffers and practiced corruption with impunity. It is that same impunity that made them leave the trail of evidence we will present to prove they are all guilty as charged,” said Taib.

He alleged that Rotich being the Treasury CS misled the public that the dams’ contract was a government-to-government arrangement when it was between a private entity and single-sourced loans from four private commercial banks without following the law.

According to the prosecution, Rotich secretly single-sourced Sh11 billion for insurance cover for the dams project and that the money was paid to the insurance firm even before the projects begun.

The hearing continues tomorrow when the prosecution is scheduled to present witnesses.