Kenya single sourced Israeli firm, Green Arava, to develop the 10,000 model farm in Galana Kulalu after its subsidiary carried out the feasibility study in a clear conflict of interest, a special audit has revealed.
The Auditor-General has poked holes into the Kes6 billion loan with Bank Leumile Israel, which cost an additional Kes2.1 billion in insurance commitment fees and interest costs.
What’s more, the loan was not deposited in Kenya, instead the National Irrigation Board (NIB) would write invoices to the Israeli bank to pay the contractor back home, effectively denying the country billions in forex exchange.
The Auditor-General questioned the use of foreign borrowing at source, saying it raised a red flag on the then Treasury CS Henry Rotich.
But it soon became clear that the intention was to bulldoze the Israeli firm to develop the irrigation project.
In 2014 Eng Daniel Baraza, the then General Manager at NIB wrote to CS Sicily Kariuki and informed her that they had resolved Green Arava should be hired.
In the letter, Eng Baraza revealed that Green Arava was the parent company of Agri Green Consulting, which had done the feasibility study.
The tender committee then approved direct procurement claiming that no other supplier could implement the technology other than the company that had designed it.
They even claimed implementation by the designer will be faster without providing authentication.
Seven years later, Green Arava failed to deliver the model firm forcing the government to cancel the tender and hand it to a new contractor Irrico Kenya at a cost of Kes797 million
“Galana Kulalau project amounting to Kes8.2 billion had not realized value for money either since production was significantly below the projected threshold. Further the special audit noted project contractor was not identified in a competitive manner,” the Auditor-General Nancy Gathungu said.
Kenya’s model irrigation project that was supposed to ensure food security was bungled by NIB management led by Eng Baraza, who went ahead to try his hands at politics as the Busia Governor after his ouster.
Ms Gathungu noted that first they hired 20,000 acres of land from Agricultural Development Corporation (ADC) at Kes3,000 per acre but only used a half of it.
They signed a contract with the Israeli firm for Kes14 billion then all of a sudden varied back to Kes7 billion, deferring some project activities due to inadequate funding.
The Auditor-General says management claims that this variation was approved by an inter-ministerial committee of agriculture, treasury, transport and infrastructure but could not provide minutes of the said meeting.
It was doomed to fail ab initio and later after Eng Baraza left the contractor claimed the government owed it Kes1 billion even as the irrigation agency claimed it owed the contractor Sh200 million.
The dispute saw the Israeli firm kicked out and a new contractor appointed.
The shenanigans have dented the government’s long-term commitment to diversify Kenya’s agriculture to include irrigation, instead of the current over-reliance on rain-fed farming.