CS Henry Rotich is seemingly not off the DCI George Kinoti’s hook. New files obtained from Italy reveal information that expose how Henry Rotich inked a wretched deal.
The information was obtained from an Italian Government-owned insurer, Service Assicurativi Del Comercio Estero (SACE), which was paid Sh11.1 billion as insurance premium for a loan to build the Sh65 billion dams.
Apparently, a team of detectives who flew to Italy to meet with SACE officials were handed a copy of the insurance agreement written in Italian thus forcing them to seek the services of interpreters.
Detectives have questioned National Treasury Cabinet Secretary Henry Rotich as they seek to determine why SACE charged 17.5 per cent of the loan amount as premium when industry rates averaged 1.5 per cent.
Experts have said Kenya paid 15 times over the fair rate to the Italian Government-owned credit insurer for insuring the loans procured from a consortium of banks led by Intesa San Paolo.
Such insurance arrangements are supposed to guarantee that the loan would be settled in case the borrower is unable to repay – including in cases of retrenchment or death of individuals.
Mr Rotich had told police that the Sh11.1 billion was as an insurance policy covering 100 per cent of the principal and interest against any potential financial risks to cushion the lenders.
“This was needed to make the facility concessional with below-market interest rates and longer tenure,” he said.
A breakdown of the insurance premiums paid to SACE showed the price for the Arror Multipurpose Dam project was Sh6.1 billion while another Sh5 billion was paid against the Kimwarer Multipurpose Dam.
Rotich said his ministry was not involved after the processes of project identification, prioritisation and procurement were completed by the line ministry and the implementing agency, Kerio Valley Development Authority (KVDA).
The Cabinet Secretary also acknowledged that he released Sh7.8 billion to KVDA for onward transmission to CMC di Ravenna, the contractor, as advance payment to help kick-start the project.
Advance payments of Sh4.3 billion were made on December 22, 2017 for Arror (15 per cent of the Sh28.5 billion contract amount) and Sh3.5 billion on November 6, last year for Kimwarer, whose contract was worth Sh23.1 billion.
At least four charges are awaiting individuals, including top Government officials found culpable by investigators. The charges include conspiracy to commit an economic crime, aiding the commission of an economic crime, abuse of office and negligence of official duty.