On Wednesday, President Uhuru Kenyatta ordered immediate cancellation of the Sh22.2 billion ($222 million) Kimwarer Dam project in a move that could see taxpayers lose billions of shillings already paid to contractors.
Similarly, President Kenyatta also revoked the tender of Arror Dam and ordered the tendering process be done afresh with the new design components and cost rationalisation plan.
According to a report handed to President Kenyatta, no reliable feasibility study was conducted on the Kimwarer project before its construction.
“The Sh22.2 billion Kimwarer Dam was found to have been overpriced and the project is neither technically nor financially viable…therefore, the technical committee recommended to the President that the Kimwarer Dam project be discontinued,” reads a statement from State House.
“The water supply mechanism would involve pumping, an aspect the technical committee found to be unsustainable in terms of operations and maintenance costs.”
Already, Sh19 billion ($190 million) is said to have been paid in advance in connection with the Kimwarer and Arror dams.
To make a case for the project’s cancellation, the technical team cited a feasibility study carried out on a similar project 28 years ago that reportedly revealed a geological fault across the 800-acre project area, “which could have had negative structural effects on the dam.”
Both projects, located in the Kerio Valley region, were meant to produce electricity and boost irrigated agriculture. The dams were to displace 900 families, schools and shopping amenities, among other public facilities.
Prosecutors alleged that the former Treasury Cabinet Secretary Henry Rotich and his Principal Secretary Kamau Thugge, together with managers of the Kerio Valley Development Authority and Italian company CMC di Ravenna, which was awarded the contract to build the two dams, colluded to inflate the cost of building the two dams to Sh63 billion ($630 million, up from Sh46 billion ($460 million).
The Italian firm has denied being part of negotiations that led to the payments — Sh11 billion ($11o million) for debt insurance and Sh4.6 billion ($460 million) as loan interest — dimming recovery prospects.