STATEMENT ON THE IMPLEMENTATION OF ARROR AND KIMWARER MULTIPURPOSE DAM DEVELOPMENT PROJECTS
Hon. Kipchumba Murkomen, EGH,
Senator Elgeyo Marakwet County
28 February 2019
1. Mr Speaker Sir, I would like to make a statement on the above subject matter in my capacity as the Senator of Elgeyo Marakwet County and the representative of the interest of both the people and the County Government of Elgeyo Marakwet.
2. Mr Speaker, the Government through Kerio Valley Development Authority (KVDA), is implementing the Arror Multipurpose Dam and Kimwarer Multipurpose Dam projects, both located in Elgeyo Marakwet County; using a loan from Italian Government and GoK counterpart funds.
3. First and foremost, let me state that the Arror and Kimwarer Multipurpose Dam Development Projects are Vision 2030 flagship projects. The immediate objective of this Vision under the Jubilee Government is to achieve food security and to enhance manufacturing. Mr Speaker, under the Arror and Kimwarer Projects it is expected that over 10,000 acres of land in Kerio valley will be irrigated.
4. Through the project there will be generation of 80 MW of hydropower as enabler to manufacturing, provision of clean water for 80,000 households and livestock; and support to the Arror and Kimwarer rivers catchments’ conservation initiatives.
5. Mr Speaker Sir, these projects are meant to address the rampant insecurity problems in the Kerio Valley Triangle of West Pokot, Elgeyo Marakwet and Baringo Counties. It is a fact that one of the best ways of addressing insecurity is through infrastructure development, job creation and guaranteeing economic activities for the people.
6. The Projects are critical in creation of employment for the young people in Elgeyo Marakwet and Baringo – some of whom have been rehabilitated from cattle rustling. It is estimated that the projects will employ over 2000 young people in the 5 year implementation period.
7. The projects will also increase direct revenue generation for Elgeyo Marakwet County through increased tourism, fees and levies, among others.
8. Through acts of corporate social responsibility, it is expected that many people in the county will benefit.
9. Mr Speaker, as the Senator of Elgeyo Marakwet County, I have been in the forefront in pushing for the implementation of these projects for the above benefits.
10. When the projects were at the initial stages in 2015, all leaders of Elgeyo Marakwet County were involved whereby we insisted that there must be thorough public participation; and prompt and adequate compensation to locals affected. To this end, KVDA has facilitated over 80 consultative meetings.
11. We understand that the government has set aside Kshs 653million for compensation which amount is held by KVDA and to be transferred to the National Land Commission for compensation purposes. It is true that the consultations geared towards land acquisition and compensation has been slow. This is partly because we must protect our people from any form of exploitation. We must all remember that public participation is a mandatory requirement under our Constitution. To that end the leaders will do everything possible to ensure that before the project commences there must be prompt and adequate compensation bearing in mind the significant sacrifice that our people are making for the good of the country and welfare of the greater population.
12. One of the main reasons why the project has not fully commenced is because of the delayed process of compensation. Unfortunately even as we push for expedited process of project implementation the welfare of the affected population cannot be wished away. No one should take advantage of this noble endeavour to argue for termination of the project. All projects across republic have been delayed for the same reasons but eventually they commenced after local leaders worked with the government to address these salient issues. I wonder why in our case similar approach is being castigated with attempts to attack the project itself.
13. Mr.Speaker questions have been raised regarding the financial model adopted in this project and whether the model should been applied in the two projects.
14. Mr. Speaker Sir, The loan funds were sourced through Engineering, Procurement and Construction plus Financing (EPC + F) mode of funding that entailed signing Commercial Contract Agreement (between KVDA and competitively out-sourced Italian construction firm, M/s CMC di Ravenna Itinera Joint Venture) prior to signing of Loan Agreement between The National Treasury (TNT) and the Italian Government.
15. Mr Speaker, all EPC+F projects have very important components of either bank guarantee or insurance. Why is this important for projects, especially those funded by EXIM Banks in countries such as US, China,Japan, Britain and in this case Italy? These bank guarantees or insurance insures the government and the people of Kenya from losses occasioned either as a result of non-performance, incompetence, delay or insolvency of the contractor.
16. Mr Speaker Sir, projects funded by Exim banks (concession loans of developed countries like in this case) come with a condition that the contractor must come from the donor country and as much as possible most of the equipment should come from that country – as a measure to promote the export of their products. In the case of this project, the contractor is Italian.
17. Implementation of the two projects will involve utilization of USD 277,407,605.50 (KShs 27.7 billion) and USD 224,422,163.92 (KShs 22.4 billion) being the Contracts amounts for the Arror and Kimwarer projects respectively, from the loan funds; to be used for construction of the dams and the downstream developments for power, irrigation and water supplies systems. On the other hand, the GoK counterpart funds will be required for meeting costs of resettlement and compensation of Project Affected Persons (PAPs) together with project management (supervision and oversight) activities. As per the Contracts, implementation duration runs from 28th December 2017 to 27th December, 2022.
18. One of the conditions for the contractor to take over – is that they must receive advance payment from the project financier (with approval of the receiving government). Advance payments range from between 10-25% of project value. In this case, it was 15%. So far and as per the Contracts, the Contractor was paid Advance Payment of USD 41,611,140.83 in Dec 2017 and USD 33,663,324.59 in Nov 2018. The payment was to enable the contractor to do mobilization and designs as contained in the Conditions of the Contracts. Advance payment is a loan to the contractor that would be recovered from future certificates of work done.
19. Other projects of similar nature implemented by the government of Kenya, and where advance payments were paid include:
Project:Karimenu II Dam Water Supply Project
Project: Itare Dam Water Supply Project
Project:Thwake Multipurpose Dam Water Project
Cost: Kshs 36,971,346,445.00
Advance: Kshs 7,394,269,289.00
Project:Northern Collector Tunnel Project
Project:Kigoro Water Treatment Works
Cost: KShs 962,085,797.00 and
Advance: Euro 3,201,465.65 and Kshs 111,601,952.45
Project:Raw Water and Treated Pipeline from Thika Dam to Kigoro and from Kigoro to Gigiri
Advance: KShs 1,205,597,800.53
Project:Kenya Towns Sustainable Water and Sanitation Program – various projects
20. Even though in these other projects no work has commenced – some have taken 2-3 years to commence – similar or even higher amounts have been paid – yet none has attracted the kind of criticism and attack from the DCI or media like the Arror and Kimwarer projects.
21. Mr Speaker Sir, I suspect that this might be a case of “giving a dog a bad name then kill it.” Mr Speaker, is someone building a case for the termination of these projects? Why has the Arror and Kimware Projects attracted this kind of treatment yet the above stated projects underwent a similar process?
22. Why has criminal investigations been commenced on a commercial contract which has its obligations spelt out in law and contract – even before the agreed timelines have lapsed (or close to lapsing)? How is this scandal warranting the negative attack and publicity? Why is it that every step of the investigation is shared with the media including social media? Is it a plan to ensure that the financier pulls out of this important project ?
23. In conclusion Mr Speaker, this is a crucial project for Elgeyo Marakwet, Kerio Valley and the country at large. We thank the Italian Government for extending this kind of support. We believe the projects will play a critical role in putting to an end some of the vices including the cattle rustling menace in Kerio Valley region.
24. Mr Speaker Sir, this project can neither be delayed nor postponed. It is critical and urgent. If there are any reasons to investigate impropriety, we urge that these should not be used as an excuse to undermine the project. We also demand equal treatment in investigation of all projects in all sectors and in all counties to be treated in a similar manner. I opine that the falsehoods being peddled are meant to whip public emotions and to give excuse to some cartels to terminate the project. There is an African proverb that says “when a hyena wants to eat its children, it first accuses them of smelling like goats”. Mr. Speaker an hyena wants to eat the goats of Elgeyo Marakwet County and as the father of the county I can’t allow the negative and selective characterization of development projects in my county.
25. Mr Speaker Sir, I urge the DCI that before he embarks on any investigations of this nature, they should engage experts with the necessary knowledge on these types of contracts and how such projects are implemented. It is unfortunate that the project is being weaponised as a tool for 2022 political fights. It saddens me when I see the labeling of Kenyan citizens based on their ethnic identity as corrupt and the massive operation being mounted against one individual’s political ambitions. The kind of fight being mounted on this individual is causing collateral damage not only in one region but even in the entire economy of the republic. I urge everyone servant of this country to desist from using public office and resources to fight political wars. Politics should be done politically by politicians and such other matters of the state such as the fight corruption and na
tional development should done objectively.