107 companies summoned in kickbacks scandal

Director of Public Prosecutions Noordin Haji (left) and Director of Criminal Investigations George Kinoti during a meeting at Enashipai Resort in Naivasha. [File, Standard]

Investigations into suspected kickback payments in two stalled dam projects has been extended to 107 firms.

Yesterday, the Directorate of Criminal Investigations (DCI) summoned the directors of the companies to its headquarters to assist in the probe of the Sh63 million Kimwarer and Arror dam projects in Elgeyo Marakwet County.

The entities summoned were paid for various services connected with the dams, whose construction was scheduled to start in 2017 but which has been delayed amid claims that top Government officials had demanded kickbacks from the contractor.

The directors of the firms are expected to report to DCI headquarters on Kiambu Road at 9am.

“The under-listed companies and their directors are believed to be connected with or have information which will assist in ongoing investigations into fraudulent construction of both Arror and Kimwarer Multi-Purpose dams valued at Ksh.63 billion whose construction was to commence in December 2017 within Elgeyo Marakwet County…,” read part of the summons.

“Failure to comply with the requisition constitutes an offence liable to prosecution,” warned DCI Director George Kinoti.

Those summoned must present various documents, including quotations, invoices and delivery notes.

Mr Kinoti said a recent aerial inspection revealed that nothing had kicked off on the ground despite the projects being allocated billions of shillings. The contractor has not broken ground on two sites despite receiving a down payment.

“Let them come and clear their names. This is a serious matter that needs serious attention. There is nothing going on at the sites. We want to know why, yet money was paid,” said Kinoti.

The directors of the companies include politicians, business executives, an aide of a senior politician, industrialists, hoteliers, travel agents and consultants.

Among the issues to be determined is whether the goods and services sought were delivered and if any payments were made.

This is the latest development in the probe that has roped in at least four Cabinet secretaries and 10 principal secretaries from various ministries.

National Treasury Cabinet Secretary Henry Rotich was on Monday questioned by the DCI on the issue.

Detectives are also expected to question the former chairman of the National Land Commission, Muhammad Swazuri, and senior Government officials.

Kinoti said detectives were trying to understand how Sh4.9 billion meant for the construction of the Arror and Kimwarer hydropower dams in Elgeyo Marakwet was spent.

According to an investigation report, the Sh4.9 billion was part of Sh6.3 billion mobilisation fund released by the National Treasury. Some of the cash was to resettle about 800 families displaced by the project.

According to records at Kerio Valley Development Authority (KVDA), Arror dam was set to cost Sh38.5 billion while Kimwarer in Keiyo South was budgeted at Sh28 billion. Detectives said the mobilisation money meant to compensate families was released in 2017, although no land had been acquired.

“At some point, the suspects approached the Kenya Forest Service to allocate them land to construct the dam, but no land had been degazetted for that purpose,” a top detective said.

Kinoti said that various Cabinet secretaries and principal secretaries seen as persons of interest had been questioned.

The groundbreaking ceremony for the two dams was supposed to take place in September 2018.

According to available paper work, the project was to be a joint venture between KVDA and two Italian firms: CMC di Ravena and Itenera.

But investigations indicate that the projects are among those that had been flagged as white elephants by Auditor General Edward Ouko in his report.

The DCI wants to establish the identity of the individuals and entities that were paid from the projects.

In a related development, a team of investigators that had gone to Rome, Italy, to seek mutual legal assistance on various issues about the projects has returned home. The team included officials from the office of the Attorney General and the Office of the Director of Criminal Investigations.

The directors of the contractor companies have been questioned at DCI and some of them have retained lawyer Ahmednasir Abdullahi to represent them.

“One director has signed an affidavit stating where the money that was paid for the construction of a dam went. It seems the money was paid as kickbacks to top State officials,” said a source who asked not to be named.

A team of investigators overflew all the major projects that are in progress to monitor their statuses. The officers visited projects in Uasin Gishu, Bomet, and Kiambu as part of the probe.

Apart from boosting food security, the dams were supposed to provide clean water for hundreds of households and generate hydro-electric power to be connected to the national grid.

Yesterday, the Italian firm, CMC di Ravenna, came out fighting, denying that it was bankrupt and promising that all its construction projects would be completed within agreed deadlines.

In an emailed response to The Standard, the firm denied that it had been declared bankrupt or insolvent, instead saying it was negotiating with its creditors.

 “CMC has voluntarily engaged in a ‘composition with creditors’ procedure to ensure it safeguards the interests of all stakeholders (creditors, investors, clients and co-operative employees). This is due to a delay in receipt of payments amounting to several hundred million euros,” the firm’s spokesman, James Henderson, wrote.

“This process has been initiated by the board of CMC to ensure full transparency and financial compliance and to underpin the sustainable profitability of the business going forward, thereby protecting all stakeholders,” added the statement.