NAIROBI, Kenya – The National Assembly’s Public Accounts Committee (PAC) has given a clean bill of health to the troubled Kimwarer, Arror, and Itare dam projects, bringing a controversial chapter to a close.
However, the decision has raised fresh concerns, with critics questioning the transparency of the renegotiated loans and the massive financial losses incurred.
The committee’s report clears the government’s handling of the projects, despite the fact that over Sh30 billion will be paid for initiatives that either never started or were abandoned halfway through.
This sum was part of a total Sh62 billion initially set aside for the projects before renegotiations reduced it by half.
At the heart of PAC’s approval was the submission by Treasury Principal Secretary Chris Kiptoo, who defended the government’s decision to resume payments, which had been halted in 2020.
According to Kiptoo, new agreements were reached with the Italian lender Intesa San Paolo in mid-2024 after Cabinet approval, allowing the government to proceed with repayments.
“The committee has noted the submission by the accounting officer and found the matter was resolved,” stated the PAC report.
Despite this, the Auditor General, Nancy Gathungu, expressed significant doubts in her report for the 2023-2024 financial year.
Gathungu highlighted that her office could not verify the authenticity of the Sh31.4 billion figure in the renegotiated loans, citing a lack of critical documentation.
The loan agreements and restructuring papers were reportedly withheld by the Directorate of Criminal Investigations, which had taken them during an ongoing probe.
“As a result, the authenticity of the outstanding balance after restructuring and the value for money for the projects could not be confirmed,” Gathungu noted in her report.
The three dams were initially meant to be financed by government loans backed by Italy, but the deals later shifted to commercial financing, which proved to be more expensive for Kenya.
The Itare Dam, located in Nakuru County, was halted after only 25% of the work was completed, while both Arror and Kimwarer dams saw no progress despite large sums being disbursed.
The audit concerns were further compounded by legal disputes and political controversies, many of which have since fizzled out.
Former Attorney General Justin Muturi recalled that he had refused to sign off on certain documents related to the projects, citing serious legal and financial misgivings.
“I couldn’t append my signature as Attorney General,” Muturi said, explaining that his refusal to sign was based on an extensive paper trail that raised concerns about the validity of the projects.
His stance reportedly caused tensions within the government at the time.
While the PAC’s decision now awaits approval from the full House, the Auditor General’s concerns remain unaddressed, with no clear answers on the veracity of the loans or the steps taken before the new agreements were signed.
The saga raises crucial questions about accountability and transparency in government-funded infrastructure projects, particularly given the scale of financial loss and the lack of tangible outcomes.
