PAC clears Kimwarer, Arror, Itare dam queries despite Gathungu’s concern over Sh31bn debt

When a Parliamentary watchdog committee gave a clean bill of health to the failed Kimwarer, Arror and Itare dam projects, it brought closure to a matter that has cost Kenya billions of shillings but also raised more questions than answers.

The National Assembly’s Public Accounts Committee (PAC) has now cleared the audit queries linked to the dams, brushing aside concerns that more than Sh30 billion will be paid for projects that never took off or were abandoned midway.

The committee relied on the submission of Treasury Principal Secretary Chris Kiptoo, who defended the government’s decision to resume payments that had been halted in 2020.

Kiptoo told PAC that the repayment of the loans followed a Cabinet approval in April 2024 and new agreements were signed two months later with the Italian lender Intesa San Paolo.

“The committee has noted the submission by the accounting officer and found the matter was resolved,” the PAC report reads.

But Auditor General Nancy Gathungu, in her latest report for the financial year ending June 30, 2024, said her office could not confirm the authenticity of the debt or value for money in the renegotiated loans.

She said key documents were withheld, making it impossible to validate the restructured figure of Sh31.4 billion.

“In the circumstances, the authenticity of the outstanding balance after restructuring and value for money for the projects of Sh31,475,529,447 could not be confirmed,” the Auditor General said.

Initially, Kenya was expected to pay Sh62 billion after terminating the original contracts. The government later negotiated new terms, reducing the figure by about half.

However, the Auditor General questioned whether proper steps were taken before these new deals were signed.

No documentation

Gathungu also pointed out that her office had not received the necessary documentation from the Treasury.

The loan agreements and restructuring papers had reportedly been taken by the Directorate of Criminal Investigations during its probe and have remained in custody since then.

Despite this, PAC maintained that Kiptoo’s explanation was satisfactory. The committee’s decision now awaits the approval of the full House when the report is tabled for debate.

The three dams were to be funded by Italian-backed government loans. However, the deals later shifted to commercial financing, which proved costlier for Kenya.

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The projects were plagued with delays, political controversies and legal disputes that have since fizzled out.

The Itare dam in Nakuru County was halted after only 25 per cent of work had been completed.

On the other hand, nothing was done at the Arror and Kimwarer dam sites, yet large sums of money were already paid out.

“I couldn’t append my signature as Attorney General. I have a paper trail on these, in soft copy,” said former Public Service Cabinet Secretary Justin Muturi, who previously served as the Attorney General. “They wanted me to sign, and I declined.”

Muturi’s stance reportedly caused friction with the President, a matter former Deputy President Rigathi Gachagua also alluded to in a televised interview.

Court cases linked to the scandal collapsed by December 2023, with all accused persons being acquitted. Investigations led by the Directorate of Criminal Investigations also appear to have lost steam.

President Ruto met with Italian Prime Minister Giorgia Meloni and mentioned in January 2024 that the projects would resume. But over a year later, no progress has been made on the ground.

While the PAC report closes the matter from Parliament’s side, the Auditor General’s doubts have not been addressed.

With billions of shillings paid out and nothing to show for it, the question of who will be held accountable remains unanswered.