The government’s plan to revive construction of the multi-billion Itare dam in Kuresoi, Nakuru County will cost taxpayers more than Sh1 billion on top of the initially projected cost, the Daily Nation can reveal.
Initially, the dam whose construction was launched in 2016 and stalled two year later, was to cost the taxpayers Sh35 billion.
However, the latest audit of the project has now revealed that the dam's construction will cost taxpayers more.
Auditor-General Nancy Gathungu.
Photo credit: File | Nation Media Group
The report by Auditor General Nancy Gathungu for the year ending June 2025, shows that additional costs accumulated over time may push the cost of the dam’s construction upwards.
Notably, the Central Rift Water Works Development Agency (CRWWDA), the body that is implementing the project, has deployed the Special Installation Police Unit (SIPU) and a security firm to complement and guard the installation from vandalism and theft, until the stalled project is revived.
Compensation of the families who were affected by the project and costs due to change in exchange rates as well as cost of living are also set to push up the cost of the mega project.
On Sunday, CRWWDA Chief Executive Officer Douglas Murei confirmed that the cost of dam’s construction is set to increase. However, Mr Murei did not give the actual figures.
“The cost of construction will definitely increase because the dam will now supply water to areas like Salgaa and others which we initially thought could be supplied with Chemususu dam,” Mr Murei said.
A year ago, while touring the project, Government Spokesperson Isaac Mwaura estimated that the cost of the dam would rise to about Sh40 billion.
“With time, other costs have accumulated and the project will now cost Sh40 billion. The government will also compensate those who were displaced by the project,” Mr Mwaura said then.
The project components include construction of a mega-dam, water treatment plant, pipeline, bulk transfer tunnel and storage tanks in and around Nakuru City.
The mega-dam, whose construction began in June 2016, had been billed as the largest of its kind in the South Rift region, after the Sh5.5 billion Chemususu dam in Baringo County.
With an initial cost of Sh35 billion, the dam had been earmarked as one of the flagship water supply projects of the then Jubilee administration under the Vision 2030, the Kenyan government’s national long-term development policy.
However, the construction of the dam projected to serve a population of more than 1 million people in Kuresoi, Molo, Njoro, Rongai and Nakuru City, as well as the neighbouring Kericho and Baringo Counties, stalled in 2018.
The construction of the project, which was to be completed about four years ago, now remains in limbo.
In 2018, an Italian company, Cooperativa Muratori and Cementisti Ravenna (CMC Di Ravenna), that was constructing the dam alleged delayed payments and later filed for bankruptcy in a court in Ravenna, Italy, before the project stalled.
Some of the machines at the stalled multi-billion Itare Dam project in Kuresoi North, Nakuru County, in this photo taken on October 9, 2023.
Photo credit: John Njoroge | Nation Media Group
The dam has also been the subject to corruption investigations by the Directorate of Criminal Investigations (DCI).
The Central Rift Water Works Development Agency (CRWWDA) in February 4, 2020 terminated the contract, triggering a suit at the International Criminal Court (ICC). CMC Di Ravenna sued for Sh12 billion, after termination of the contract.
When the construction was halted, the contractor had been paid Sh11 billion representing 39 per cent of the contract sum.
At the time, critical sections such as a reservoir construction, pipeline and a tunnel had been completed. The dam foundation, water treatment plant and an outlet tunnel had also been done.
“During the period under review, the overall completion rate remained at 27 per cent. Works were suspended from 2018,” the Auditor General’s report reads.
The report has further revealed that the ICC has confirmed withdrawal of the arbitration cases and the contractor -CMC Di Ravenna was in the process of nominating a (Joint Venture) partner prior to submission of the joint bid for approval, before it revives construction works.
The Central Rift Water Works Development Agency has also retained the services of Gauff Consulting Engineers to assist in the revision of the contract documents to pave the way for the revival of the construction works.
“The International Criminal Court (ICC) last year confirmed withdrawal of the arbitration cases. This paved way for commencement of negotiations for a new Facility Agreement with the Development Aid Committee. The disclosure of third party claims and settlement mechanism process is also ongoing. The resumption of works process is ongoing, with the contractor CMC Di Ravenna currently doing merger and acquisitions,” part of the report reads.
However, the Auditor General has questioned why a refund of Sh4.3 billion advance payment has not been made by the contractor upon stalling of the dam, as per the law.
In 2018, the contractor, according to Ms Gathungu was subjected to pre-bankruptcy proceedings in an international court of law and the outcome remains unknown.
“At the time when the construction was halted, the contractor had been paid Sh11 billion representing 39 per cent of the contract sum, against certified value of work done which stood at 27 per cent. The payment arrangement was such that the CRWWDA jointly with the consultant, certifies the contractor’s fees notes for money to be released by the Ministry of Water,” the report reads.
“Subsequently, in 2020, the agency terminated the contract and demanded a refund of the advance payment of Sh4.3 billion and performance guarantee as provided for in the contract. However, as at the time of the audit, the advance payment had not been refunded and the project remained stalled,” the Auditor General said.
Further, the Auditor General questioned payments made to the consultant in the project, despite stalling of the project.
Construction of the main base of Itare Dam in Ndoinet, Kuresoi North, Nakuru County, on February 8, 2017.
Photo credit: File | Nation Media Group
“The consultant duties, among other things included monitoring the percentage of works executed and informing the employer about actual progress of works. He had been paid Sh491.4million (71per cent of the contract sum) by June 2020. It was not clear how the consultant’s payments were justified without revising the contract despite the project having stalled,” the report says.
The audit further revealed that Sh10 million was spent on the dam without any budgetary provision or authority.
However, the CRWWDA said the Sh10 million is an amount withheld on account of the Itare withholding taxes not paid by the contractor, whose payments were made directly.
Itare dam was picked under the national water master plan as one of the Jubilee government’s flagship projects.
With a capacity to yield 100,000 m3/day, the 57 m high dam was expected to solve water problems in Nakuru and neighbouring countries of Kericho and Baringo.
