This archive report was first published on 20 September 2019.
Published on September 20, 2019
Kenya's decision to cancel the Kimwarer Dam project and downscale the Arror Dam project has sparked concerns about the potential impact on the country's relationship with Italy.
Water Cabinet Secretary Simon Chelugui has warned that the move could have serious ramifications, not just financially but also on relations between Kenya and Italy.
The Arror and Kimwarer Dams project are the subject of a court case facing more than 20 officials, including National Treasury Cabinet Secretary Henry Rotich, who face several corruption-related charges.
On Wednesday, President Uhuru Kenyatta cancelled the Kimwarer Dam project, citing its economic nonviability, with the cost having been exaggerated at Ksh.22.2 billion.
The Arror dam had been costed at Ksh.28.5 billion, but will now be downscaled to a 60-metre dam, reducing the cost to at most Ksh.15.4 billion.
Chelugui has expressed concerns that cancelling the contract with the Italian firm CMC Di Ravenna, which is also implementing the multi-billion Itare dam in Nakuru, could expose the country to losing monies already paid for the project.
“Termination would make us lose payments we have made and it can also lead to cross-default. Meaning any other funding we get from Italy may impact on other programmes. The final decision is made through financing agreement,” said Chelugui.
