DIRECTOR OF PUBLIC PROSECUTIONS (DPP)
MR. NOORDIN M. HAJI, OGW, CBS
PRESS RELEASE ON INVESTIGATIONS OF ARROR AND
KIMWARER DAMS
Good Morning everyone.
Thank you for coming.
Our Constitution articulates some of our national values and
principles of governance to include Integrity, Transparency,
Accountability, Equity, Human Dignity, Inclusiveness, Patriotism
and Sustainable development, aspects that citizens expect
everyone especially those in positions of authority to uphold.
Upholding these values which form the core of our soul as a
Nation is vital to our very existence as a people. Whenever these
values are betrayed by those in positions of authority, who misuse
their privilege to conspire, connive and commit crimes against the
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people; our laws expressly mandate the law enforcement agencies
and the Office of the Director of Public Prosecutions to step up
and safeguard the public good and interest.
Public corruption is a blatant abuse of power by persons in
position of authority and it threatens the very fabric of our nation.
Kenyan’s have seen and experienced firsthand how public
corruption tears us apart, undermines and destroys our governance
structures, betrays the citizens’ trust and kills the civic spirit of
people by robbing them of the hope that they can live in a country
that is not fundamentally rigged against them and in which
nobody is above the law no matter how powerful.
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The Office of the Director of Public Prosecutions draws its
mandate directly from Kenyans who enshrined it in the
Constitution, as a safeguard against crime and criminal elements.
As the Director of Public Prosecutions, I take my constitutional
mandate seriously. Having seen the adverse effects of corruption
in our society, the Office of the Director of Public Prosecutions
has stepped up efforts to prosecute corruption and economic
crimes and bring to account those culpable no matter their station
in life. I know that when citizens trust that our laws apply to all
and l mean everyone, then they will in turn uphold and respect the
rule of law.
The crime of Corruption is not only against each of us
individually, but also against all of us collectively as the people of
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Kenya. Each time we make the decision to charge and prosecute
corruption cases, we know that we are safeguarding the public
good. Each prosecution sends a powerful message to the corrupt
or those being tempted by opportunities to steal that they shall be
prosecuted. As a society guided by laws, we collectively agree that
those corrupt individuals who put honest hardworking
Mwananchi at a disadvantage at times even condemning them to
loss of lives; must pay for their crimes. Most importantly, our
message to every hardworking, law abiding Kenyan, those who
play by the rules and pay their taxes, is - we are going to stand by
you.
On 18th September 2018, the Director of Criminal Investigations
received complaints touching on governance and operation
challenges in the management of the two dam projects (Arror and
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Kimwarer) that required urgent attention. Upon investigations by
the DCI, it was established that the conception, procurement and
payment process for the Arror and Kimwarer Dam projects in
Elgeyo Marakwet County were riddled with massive illegalities.
Having established this, the DCI and I set up a joint team that
conducted further in-depth investigations which revealed that
several persons and legal entities committed criminal acts and
omissions.
In late February 2019, I received a preliminary investigation
report and upon review, I directed, on the 8th of March 2019, that
the breaches of the law disclosed, and their consequences were
serious and merited a detailed and thorough investigation. I
further directed that the joint team fast track the investigations and
engage international partners.
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In June 2019 the DCI submitted the investigation file to the ODPP
for direction.
The investigations established that government officials flouted
all procurement rules and abused their oath of office to ensure the
scheme went through. Many procurement procedures as stipulated
by the law for such projects were ignored and the law was
circumvented to ensure that CMC di Ravenna got the contract.
KVDA chose Public Procurement and Disposal Act (PPDA),
2005 for the concession agreements despite the fact that the law
in 2013 prescribed Public Private Partnerships (PPP). The
officials who should have pointed this out failed to do so and went
ahead to award the contracts to CMC De Ravenna of Italy to run
concurrently while aware that the firm was, at the time of award,
straining and getting into voluntary liquidation back in Italy. We
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also note that the same firm had been awarded three other mega
dam projects that are either incomplete or are yet to commence.
KVDA management failed to comply with the principle of value
for money which demands that there be competition amongst
suppliers, efficiency and effectiveness in the procurement process,
fairness and non-discrimination, integrity, transparency, and
accountability. This was, in flagrant disregard to the laid down
public procurement laws, regulations and rules resulting in
massive loss of public resources.
Whereas the alleged commercial contract signed between KVDA
and CMC Di Ravenna/Itinera JV clearly states that Kimwarer
Dam would cost USD 204,020,149.02 while Arror Dam would
cost USD 252,188,732.27 totaling to USD 456,208,881
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(approximately Kshs 46 Billion), the National Treasury
negotiated a commercial facility increasing the amount to
approximately Kshs. 63 Billion which is 17 Billion more than
necessary or required payable on a timely basis without regard to
performance or works. We now also know that CMC di Ravenna
submitted draft technical designs in February 2019 four years
behind schedule.
Further, the National Treasury entered into a facility contract in
Euros while the commercial contracts were in USD therefore
occasioning further loss to the Kenyan Government through
exchange rates. Of note, out of the Kshs 63 Billion in respect of
the projects, as at January 2019, the government of Kenya has
made the following payments: advance payment, commitment
fee, insurance and other costs totaling Kshs 19,714,366,991. Out
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of this, Kshs 11 Billion for insurance was paid upfront. In contrast,
if the borrowing was justified, a government guarantee would
have sufficed at no cost to the Government of Kenya and
Mwananchi. Further, Euros 40,031,927 (approximately Ksh 4.6
Billion) was borrowed in addition to the principle amount to pay
interest in advance during the construction period which to date
has not commenced. As a country, we continue to pay interest on
the loan.
A further Kshs. 643 Million was released by the National Treasury
as counterpart funds which was intended for the resettlement of
the persons that would be affected by the said projects, as
compensation for the land acquired. However, there is no
evidence that land has been acquired four years down the line.
Furthermore, Kenya Forest Service in a bid to protect our
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environment strongly opposed any excision of forest land pointing
to significant adverse impact on the forest ecosystem.
Based on expert opinion, if this project was carried out in strict
adherence to the law and existing Policies in place for
safeguarding the public interest it should not have cost Kshs 63
Billion.
The evidence established malpractices that impacted on our public
debt a treasury report dated 3 march 2017 opined that, “if this
borrowing is converted into Kshs at the prevailing rate of 106.2 it
translated to a approximately a loan amount of 61 Billion. Added
to the GoK total public debt stock of KSHs 3,983 Billion as at 27th
February 2017 debt stock increases to Ksh 4,043 billion
equivalent to 52.9% in the Net Present Value of Debt to GDP
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which is above the limit of 50% provided for in section 26 (1) of
the Public Finance Management Regulations.” This advice was
ignored. It is a high betrayal of public trust to disregard and
breach public debt regulations. This kind of crime and
irresponsibility enslaves us with unnecessary debt and mortgages
our future generations.
The persons we are charging today were mandated with
safeguarding our public interest and deliberately breached this
trust and not only bound Kenya to a loan but they ensured that the
funds did not come into the consolidated fund, in effect
guaranteeing that no one was oversighting its use, they broke the
law on Public finance Management. Under the guise of carrying
out legitimate commercial transactions colossal amounts were
unjustifiably and illegally paid out through a well-choreographed
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scheme by government officers in collusion with private
individuals and institutions.
Upon receiving and reviewing the evidence, I am satisfied there is
sufficient evidence to charge and prosecute the perpetrators. It is
instructive to note that the National Prosecution Policy requires
the evidential test to be met before the public interest can be
considered. Therefore, in applying the evidential test, one must
consider all the evidence and information availed to the
prosecutor, and in concluding that it is in the public interest to
prosecute these cases, I have considered that such infractions are
crimes against Mwananchi individually and collectively and the
decision to prosecute is in line with safeguarding the public good.
This decision has been made professionally, independently,
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devoid of any external influence, political consideration, or any
other extraneous matters.
Consequently, I have today directed the DCI to effect the arrest
and immediate arraignment before court, of the accused persons
named herein below:
NO NAME COMMITTEE
1. Henry Kiplagat Cabinet Secretary, National
Rotich Treasury
2. Kamau Thugge Principal Secretary National
Treasury
3. Dr. Susan Jemtai Principal Secretary, Ministry of
Koech East Africa Community
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4. David Kipchumba Managing Director, Kerio Valley
Kimosop Development Authority (KVDA)
5. Kennedy Nyakundi Chief Economist and Head of
Nyachiro Europe II Division National
Treasury
6. Jackson Njau Director Resource Mobilization
Kinyanjui Department National Treasury
7. Titus Murithii Inspector General of State
Corporations
8. Paolo Porcelli Director CMC di Ravenna
9. CMC di Ravenna –
Itinera JV Italy
10. CMC di Ravenna –
Itinera JV Kenya
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11. William Kipkemboi Head of Supply Chain
Maina Management (KVDA)
12. Paul Kipkoech Serem Manager Engineering Services
(KVDA)
13. Francis Chepkonga Tender Committee
Kipkech
14. Samuel Kimutai Tender Committee
Koskei
15. David Juma Onyango Tender Committee
16. Patrick Kiptoo Tender Committee
17. Elizabeth Kebenei Tender Committee
18. Esther Jepchirchir Tender Committee
Kiror
19. Moses Kipchumba Ad hoc Technical and Financial
Evaluation Committee Team 2
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20. Eng. Nelson Korir Ad hoc Technical and Financial
Evaluation Committee Team 2
21. Eng. Isaac M. Kiiru Ad hoc Technical and Financial
Evaluation Committee Team 2
22. Eng. Patrick Kipsang Ad hoc Technical and Financial
Evaluation Committee Team 2
23. Fredrick Towett Ad hoc Technical and Financial
Evaluation Committee Team 2
24. Jotham Rutto Ad hoc Technical and Financial
Evaluation Committee Team 2
25. Charity Muui Ad hoc Technical and Financial
Evaluation Committee Team 2
26. Geoffrey Mwangi CEO, National Environment
Wahungu Management Authority (NEMA)
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27. David Walunya National Environment
Ongare Management Authority (NEMA)
28. Boniface Mamboleo National Environment
Lengisho Management Authority (NEMA)
For the following offences:
1. Conspiracy to Defraud contrary to section 317 of the Penal
Code, Cap 63 Laws of Kenya.
2. Wilful Failure to Comply with applicable Procedures and
Guidelines relating to Procurement contrary to section 45 (2)
(b) as read with section 48 of the Anti-Corruption and
Economic Crimes Act No. 3 of 2003;
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3. Engaging in a project without prior planning contrary to
section 45 (2) (c) as read with section 48 of Anti-Corruption
and Economic Crimes Act No. 3 of 2003;
4. Abuse of Office contrary to section 46 as read with section
48 of Anti-Corruption and Economic Crimes Act No. 3 of
2003.
5. Committing an offence of financial misconduct contrary to
section 197 (1) (o) (i) of the public finance management act
no. 18 of 2012.
6. Fraudulent Acquisition of Public Property contrary to section
45 (1) (a) as read with section 48 of the Anti-Corruption and
Economic Crimes Act, 2003.
7. Knowingly giving a Misleading Document to Principal
contrary to section 41 (2) as read with section 48 of Anti-
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Corruption and Economic Crimes Act no. 3 of 2003 of the
Laws of Kenya.
8. Wilful Neglect to Perform Official Duty contrary to section
128 as read with section 36 of the Penal Code.
The Director of Public Prosecutions is cognizant of the principle
of innocent until proven guilty the determination of which can
only be made by a court of law. The decision to charge is based
on the evidence that is available to the DPP at the time the decision
is made.
In view of the international nature of these crimes, we realize that
we cannot fight corruption on our own and as a strategy to fighting
economic crimes, the Office of the Director of Public
Prosecutions (ODPP) has prioritized tracing of proceeds of crime,
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benefits and instruments of crime, asset confiscation and
forfeiture. Consequently, this investigation has been phased. To
this end, the ODPP has made several international mutual legal
assistance requests to the UK and Italy to assist in the financial
investigations. Once investigations are complete more charges
will be preferred.
Being cognizant that corruption always fights back and that there
may be elements who may seek to exploit these indictments to
instigate social unrest we have put in place mechanisms to
monitor any such attempts, which will be countered with whole of
government response!
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