Sh82bn Thwake dam runs into funding woes

The Sh82 billion Thwake dam project is unlikely to be completed after the government failed to negotiate or secure funding for three phases of the project, a new audit shows.

Auditor-General Edward Ouko says although the African Development Fund and the Government of Kenya have approved funding of Sh42.365 billion for the first phase, the remainder of the phases with a budget of Sh39.845 billion is yet to be financed or planned for.

“The State Department for Irrigation is yet to negotiate or look for financiers for the remaining phases. Consequently, it is not clear how the three phases will be financed to project completion,” Mr Ouko said in a qualified audit opinion on the financial statements of Thwake Multi-Purpose Water Development Program Phase I.

The dam project is being financed by a loan from the African Development Bank and the government through budgetary allocations to the Ministry of Agriculture, Livestock and Irrigation.

Phase One of the project comprises a multi-purpose dam and associated works where the government is pumping Sh32.342 billion while the ADB has committed Sh8 billion.

Phase one of the project, which involves construction of the dam and associated structures, is currently under implementation. The project is being constructed by a Chinese company, China Ghezuoba.

In phase II which comprises hydropower generation is being financed to the tune of Sh0.52 million by the government and ADB Sh3.83 billion

The third phase will be the construction of water supply; sanitation and waste water infrastructure where the government will spent Sh5.27 billion while ADB funding is expected to be Sh5.36 billion

The last phase will be the construction of irrigation development where the government is expected to spend Sh19.18 billion while ADB will pump in Sh5.10 billion.

Sh82.21 billion

The total project cost for phases one to four will see the taxpayer fork out Sh59.95 billion while ADB will provide Sh21.94 billion, bringing the total cost to Sh82.21 billion.

Mr Ouko said the dam project has acquired 9,158 acres of land affecting 1792 households in Makueni and Kitui Counties in Lower Eastern Kenya.

Mr Ouko questioned the failure by the Irrigation Ministry to release Sh676 million to the National Land Commission (NLC) for compensation of 186 project affected persons.

“No explanation has been provided for the delay in the release of the money to the NLC. Site visit revealed that some project affected persons had not moved from the project site yet this should be a protected site.

“In the circumstances, non-remittance of money to project affected persons may affect timely implementation of the project and issues of squatters may arise if project affected persons do not relocate after compensation,” Mr Ouko said in a report tabled in Parliament.

Mr Ouko said during the year to June 2018, a total of Sh1,399,748,901 were made to NLC for onward transmissions of project affected persons.

“However, out of the 1606 project affected persons, 77 were expected to be paid an amount of Sh139 million but have not been compensated by NLC,” Mr Ouko said.