NAIROBI, Kenya — A new audit by Nancy Gathungu has exposed massive cost overruns and delays in the Thwake Dam project, pushing its budget close to Sh49 billion and raising concerns over value for money and project management.
The dam, located in Makueni County and Kitui County, was initially contracted at Sh36.97 billion in November 2017 but has since ballooned to Sh48.89 billion, an increase of Sh11.92 billion.
When combined with interest penalties from delayed payments, the total taxpayer exposure rises to at least Sh12.4 billion.
“The delay in the completion of the project may result in loss of funds and inability to meet the project objectives,” Gathungu warned in the report tabled in Parliament.
The audit highlights multiple failures, including stalled construction, unlawful cost variations, and avoidable financial penalties.
Delayed payments to contractors alone have triggered interest charges of Sh569 million, with Sh468.1 million still unpaid.
“Interest on delayed payments was an avoidable liability… and distorts current or future fiscal appropriations,” the report states, warning that continued delays could push costs even higher.
Originally scheduled for completion in November 2022, the project has faced repeated extensions, first to February 2024, then December 2024, and later August 2025.
By the end of 2024, it had only reached 94.2 P.c completion.
A site inspection in July 2025 revealed that construction had effectively stalled, with no activity for over a year and workers having vacated the site, a situation the Auditor General said could further inflate costs due to changing market conditions.
Water Cabinet Secretary Eric Mugaa, however, has maintained that the project remains on track, citing ongoing talks with the African Development Bank to extend the completion timeline to December 2026.
“Once completed, this landmark dam will provide clean drinking water, enable irrigation for more than 40,000 hectares, and generate 20MW of hydropower,” Mugaa said in earlier remarks.
Beyond delays, the audit uncovered governance breaches within the Ministry of Water and Sanitation, with contract variations reaching 32 P.c — exceeding the legal cap of 25 P.c.
“Management was in breach of the law,” Gathungu noted.
The report also flagged poor implementation of community projects funded under an Sh80 million corporate social responsibility programme.
Thirteen projects were found defective, including non-functional boreholes, vandalised water tanks, and structurally compromised classrooms and health facilities.
Further concerns include an expired contractor insurance cover, which lapsed in February 2025 and had not been renewed by July 2025, exposing the government to financial risk in case of default or defects.
Land acquisition challenges also persist despite Sh3.5 billion already spent to compensate more than 1,800 affected persons.
Disputes over four parcels remain unresolved, raising the risk of litigation and project delays.
The Thwake Dam project has been a flagship initiative under President William Ruto’s administration, with the government previously projecting that total costs could rise to Sh55 billion following an announced expansion.
Once completed, the dam is expected to supply water for domestic use, irrigation, and livestock, significantly boosting agricultural productivity in the Ukambani region.
