Italian firm that bribed Ruto sues Kenya, demands Sh80bn over cancelled tender

• Nov 23, 2021

An Italian company contracted by the government to undertake construction of Arrow and Kimwarer multipurpose dams is seeking payment of Sh80 billion even though no work was done on the ground.

The Milimani Anti-Corruption Court on Tuesday, November 23 heard that CMC Di Ravenna Itinera Joint Venture has filed a case before the arbitration court at The Hague to compel the government of Kenya to make the payment.

In an opening statement at the beginning of the trial, the DPP through special prosecutor Taib Ali Taib informed the court that the contractor was a ghost company at the time of being awarded the Multi-billion tender.

“We will show you by way of evidence that the accused persons conspired to award the tenders in question to the company known as CMC Di Ravenna Itinera Joint Venture even though that company did not exist at the time they were awarded the tenders.

“That at the time agreements were signed to pay them the planned billions of shillings, they were not even registered and did not exist in law at the time,” Taib said.

He added; “the prosecution will prove to court that CMC Di Ravenna Itinera Joint Venture actually never bought or acquired any tender documents. They did not submit any bidding tender document for the construction of the two dams. CMC Di Ravenna Itinera Joint Venture was not one of the companies forming record at the opening of the tenders.”

Taib further informed the court that the Cabinet Secretary only approved construction of one dam; Arror. That it did not approve the construction of Kimwarer.

However, accused persons conspired and indeed to flout tender for both projects. The tender was awarded to CMC Di Ravenna Itinera Joint Venture in breach of all laws related to procurement.

“Will will demonstrate to court that the original tenderer was CMC Di.Ravenna of Italy not CMC Di Ravenna Itinera Joint Venture. Despite the tender being CMC Di.Ravenna, a new firm was inserted as a joint venture alongside Aecom of South Africa. The joint venture was included illegally with impunity, “Taib.

However, the tender was issued to the joint venture with no mention of Aecom of South Africa.

The court heard that the letter of award of the two projects was not issued to CMC Di Ravenna Or Aecom of South Africa but to a new company CMC Di Ravenna of south Africa.

“The agreement between KVDA and CMC Di.Ravenna of South Africa was not signed by the two and instead was signed by a new company CMC Di Ravenna Itinera Joint Venture that never participate in the bidding of projects which did not exist at the time of signing the contract,” Taib said.

He said that the prosecution said it will produce evidence to prove beyond any reasonable doubt that the former Finance CS Henry Rotich acted outside the law and conspired with his co-accused to defraud the government using the project for purposes of self-enrichment.

CS Rotich is said to have secured the loans without any competitive process, against the interest of the Republic of Kenya, at a very high interest and on terms that were prohibitive and not in the interest of the republic.

“We wish to show how the CS for finance Rotich breach the law and secured loans for KVDA to construct the dams even though he had no legal authority to secure any loan for state co-operations.

“He only had the authority to secure loans in regard to the central government, which was not involved in this case,” Taib said.

Taib said that Rotich bought and paid over sh 8billion for insurance that took care of the interest of the Italian contractor and not the government of Kenya.

“He did so without following the procurement process. He proceeded to take the loans from four Italian banks under two agreements which he disguised as government to government agreement yet they were not,” the prosecution said.

The court had that the Italian government never signed or negotiated the agreement and neither of its entities signed those agreements on its behalf.

Rotich breached the law by not bringing the proceeds of the loan to the consolidated bank account of the government of Kenya.

“The Money has been disbursed from Italy to an account in United Kingdom without the involvement of Kenya and later transfer to the Italian contractor without passing through the consolidated fund in Kenya as required by law,” said Taib.

The court heard that the government risks losing sh 80 billion although the value of the project was Sh 65 billion.

“Will proof that it is not only the Sh 65 billion they planned to steal but total outcry the government has been exposed is in excess of Sh 80 billion which the contractors are actively pursuing in an arbitration court in the Hague,” added Taib.

The prosecutor states that the contractor is seeking the amount even though no dams exist on the ground.

The court heard that the tendering process of two projects started without the financial budget or Parliament.

Taib said that Rotich and his co-accused acted in impunity by disregarding all procurement laws.