Thugge disowns Rotich in Sh63billion dams scandal

Mr Kamau Thugge (left) and ex-treasury CS Henry Rotich.

Former Treasury Principal Secretary (PS) Kamau Thugge has opted to be a State witness in the Sh63 billion Arror-Kimwarer dams scandal case, turning the heat on his former boss Henry Rotich. Director of Public Prosecutions Noordin Mr Haji withdrew charges against Dr Thugge Tuesday, saying the former PS would become a State witness in the case in which they were among people accused of jointly conspiring to defraud the government of $501,829,769 (Sh55.04 billion) by entering into a deal to construct the two dams in Elgeyo-Marakwet County without approval.

They allegedly committed the offence between December 17, 2014 and January 31, 2019. In an application last month seeking to quash charges preferred against him, Mr Rotich, the former Treasury Cabinet Secretary, had argued that Dr Thugge was the accounting officer of the ministry and should be held accountable for any financial decisions on the dams project.

The former Cabinet Secretary cited a clause in the Public Procurement and Disposal Act which describes the PS of a ministry as the accounting officer. As the CS, Mr Rotich argued, he did not have the powers to direct the parent ministry or the procuring entity on procurement matters. The charges are not only illegal by also a gross misapprehension of the law applicable to the duties and obligations of the cabinet secretary of the National Treasury,” he said.

Arror and Kimwarer dams cost

Dam Cost (Sh bn)
Kimwarer 21.014
Arror 25.975
Total 46.989

The real cost of the dams stood at Sh46.9bn against treasury’s Sh63bn meaning the quotation was exaggerated by close to Sh17bn

Chief magistrate Douglas Ogoti allowed the application by the DPP withdrawing the charges against Dr Thugge together with former Tourism and Wildlife PS Susan Koech, who was also facing charges over the procurement contracts for the construction of the two dams. Reached for a comment, Mr Rotich’s lawyer Katwa Kigen said they were waiting for Dr Thugge’s witness statement to get a clear picture and know how to respond to it.

Senior Counsel Philip Murgor, appearing for Dr Thugge, did not object to the withdrawal of the charges, so long as there were no plans of arresting and charging him afresh. He asked for the release of the former PS’s passport and the Sh15 million cash bail, which he had deposited in court. Senior assistant DPP Alexander Muteti also asked for more time to confirm whether the trial would proceed without the directors of the Italian company CMC Di Ravenna Itinera JV and CMC Di Ravenna Itinera JV Kenya Branch. Mr Muteti said the DPP through mutual legal assistance from the Italian government was seeing whether Paolo Porchelli, who is yet to be arrested, will be brought to the country to face the charges.

The charges against Dr Thugge included conspiracy to commit an economic crime, improperly conferring a benefit, abuse of office, committing an offence of financial misconduct, engaging in a project without prior planning and failing to comply with rules and regulations relating to management of public finances.

Mr Rotich and Dr Thugge had denied several charges of entering into a commercial loan facility agreement disguising it as a government-to-government loan guaranteed by the Italian government. Mr Porcelli, CMC Di Ravenna- Itinera JV and CMC Di Ravenna- Itinera JV Kenya Branch are accused of jointly conspiring to defraud the government of Sh27,740,760,550 between December 17, 2014 and September 27, 2018.

Mr Rotich had distanced himself from blame saying the contracts were sanctioned by former Cabinet colleague Judi Wakhungu and former Attorney-General Githu Muigai. He said it was unfair and irrational to take him to court yet the projects were entered by Kerio Valley Development Authority (KVDA) with the approval of the parent ministry. KVDA was then under the Ministry of Environment and Natural Resources and Regional Development Authorities, with Ms Wakungu as the CS. Mr Rotich said he received a letter from Ms Wakhungu in March 14, 2016 containing the projects summary reports, including the proposed financing of the two dams.

He said Ms Wakhungu then requested the Treasury to borrow funds on behalf of KVDA. According to court documents, the Public Debt Management Office at the Treasury reviewed the reports before seeking legal clearance from then Attorney-General, Prof Muigai, who recommended to Mr Rotich to sign the loan agreements. Mr Rotich said he acted under statutory powers prescribed by the Public Finance Management (PFM) Act, which states that the CS may raise loans, provided that the terms and conditions of such loans are set out in writing.

The former CS said financing contracts and loan agreement were well stipulated and that there was no criminality. The case will be mentioned on February 10.

Source: Business Daily Africa,