The government is seeking Sh7.7 billion insurance money paid to Heritage Insurance and Standard Chartered Bank for the controversial Arror and Kimwarer dams project.
The State Department for Northern Corridor and the Kerio Valley Development Authority (KVDA is demanding Sh4.1 billion from Heritage Insurance for the Arror dam and Sh3.6 billion from Standard Chartered Bank for the Kimwarer dam ahead of the expiry of the guarantee in June next year.
The government is claiming the payment following the failure by Italian construction company CMC di Ravenna, to construct the Arror and Kimwarer dams despite being paid billions of shillings.
The company has since filed for bankruptcy.
“I can confirm that the Treasury has recalled Sh4.1 billion guarantee for Arror dam project. I cannot, however, confirm whether the money has hit the Treasury accounts,” said Regional Development PS Belio Kipsang .
“Heritage Insurance had guaranteed that if there is non-performance on the part of the contractor, they will give us the advance payment.” He added.
The Italian firm was awarded the contract for the construction of the dams five years ago but the project never materialized. CMC Di Ravenna-Itinera JV received Sh4.3 billion on September 27, 2018, as an advance payment for Arror dam and Kimwarer, an advanced payment of Sh3.5 billion was approved on July 2, 2018.
Another Sh11 billion offshore payment was made to Italy’s SACE Insurance. According to evidence submitted in court papers.
The multibillion-shilling dams scandal has become one of the major graft cases in the country. In July 2019 the Director of Public Prosecution Nordin Haji ordered for the arrest and prosecution of Treasury CS Henry Rotich and his Principal Secretary Kamau Thugge among other top government officials over Arror and Kimwarer dams scandal.
TREASURY CS HENRY ROTICH ARRESTED OVER DAMS SCANDAL