CS Rotich, PS Thugge and 8 others deny graft charges in Sh63bn dams’ scandal

July 23, 2019 11:50 am
The prosecution has lined up a 10-count charge sheet ranging from abuse of office, engaging in unplanned projects, receiving bribes among other economic crimes/CFM

, NAIROBI, Kenya, Jul 23 – National Treasury Cabinet Secretary Henry Rotich, his Principal Secretary Kamau Thugge and eight others were on Tuesday charged with corruption in the Sh63 billion Arror and Kimwarer dams’ scandal

They were arraigned before Chief Magistrate Douglas Ogoti at the Milimani Law Courts where they denied more than 10 counts ranging from abuse of office, engaging in unplanned projects, receiving bribes among other economic crimes.

The charges were read out to them in a packed court at the Milimani Law Courts on Tuesday morning, following their arrest on Monday when the Director of Public Prosecutions approved their arrest and prosecution.

There were 10 suspects in court, with the Director of Criminal Investigations (DCI) George Kinoti indicating that he will be applying for local and international warrants for others still at large—including three Italian executives from CMC Di Ravena.

The DPP released a list of 28 individuals, accused for playing a role in the multi-billion shillings scandal, among them officials of Italian firm CMC di Ravenna that was contracted to construct the dams.

Director of Criminal Investigations George Kinoti has intimated that he will be applying for local and international warrants against those who are yet to surrender to police.

“The investigations established that government officials flouted all procurement rules and abused their oath of office to ensure the scheme went through,” Haji said on Monday.

While detailing their crimes, Haji said the officials had breached public debt regulations.

“If this project was carried in the strict adherence to the law and existing policies in place to safeguard public interest, it should not have cost Sh63 billion. The evidence establishes malpractices that impacted on our national debt,” he said.

“Some Sh4.6 billion was borrowed in addition to the principal 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. We borrowed, the loan had interest, we borrowed more money to pay the interest which also attracted interest,” Haji said.

“A further Sh643 million was released by the National Treasury as a counterpart funds which was meant for the resettlements of the persons that would be affected by the same projects for the compensation of land acquired. However, there is no evidence that land has been acquired four years down the line. Furthermore, Kenya Forest Service any excision of forest land, pointing to significant adverse impact on the forest ecosystem.”

Rotich is on record confirming that the government had spent Sh12 billion to secure funding for the construction of the two dams, with the sum having been paid out to meet set conditions before the actual funding.

READ: AG okayed Sh12bn to secure funding for Arror, Kimwarer dams – Treasury

“Like any other standard loan facility signed by the government, there are several conditions to be met before funds are available to the borrower and the contractor to commence work,” he said in a press statement published in local dailies at the height of the police investigations in March.

The Sh12 billion was part of the conditions precedent outlined in a financing agreement approved by the Attorney General before the National Treasury signed it on April 18, 2017, he explained at the time.

The amount entailed an arrangement fee of Sh545.9 million, a Sh359.5 million commitment fee, a Sh3.5 million agency fee and a Sh11.1 billion insurance premium paid to an Italian contractor.

According to Rotich, the government-owned Italian firm – Servizi Assicurativi del Commercio Estero (SACE) – was paid an Sh7.8 billion advance fee representing 15 per cent of the contract amount.

The National Treasury at the time denied reports that up to Sh21 billion had been paid out in respect to the construction of Arror, and Kimwarer dams before commencement of works.

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