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MP pocketed over Sh300m for ‘helping’ Italian firm win multibillion dam project

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KIPCHUMBA SOME

By KIPCHUMBA SOME
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An MP could have been paid more than Sh300 million to facilitate a troubled Italian construction firm to win a lucrative Sh29 billion tender to build a dam at the centre of criminal investigations, a confidential document seen by the Sunday Nation shows.

Lamu West MP Stanley Muiruri Muthama, a director of Stansha Ltd, is believed to have pocketed nearly Sh330 million as “consultancy fee” for enabling the cash-strapped Italian construction conglomerate CMC di Ravenna to win the tender to build the stalled Itare Dam in Kuresoi, Nakuru County.

The company also won tenders to build the Arror and Kimwarer dams in Elgeyo-Marakwet County, which have been mired in controversy, thus leading to the arrest and prosecution of senior government officials, among them former Treasury Cabinet Secretary Henry Rotich.

Kenyan authorities also want the overall CEO of CMC di Ravenna Group, Mr Paolo Porcelli, extradited to the country to face charges related to the Arror and Kimwarer dams scandals.

In July, police officers from the Directorate of Criminal Investigations (DCI) arrested Mr Muthama at the Jomo Kenyatta International Airport and transported him to Eldoret, where he was charged with 13 counts of tax fraud amounting to Sh487 million. 

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Investigators told the court Mr Muthama knowingly under-declared his company’s income, thereby evading payment of Sh488 million in corporation tax and Value Added Tax from 2013 to 2017, before he became an MP.

According to the charge sheet, the tax in question was derived from income from Stansha Ltd’s business activities within Kericho, Kajiado and Nakuru counties.

The first-time MP pleaded not guilty to all the counts and was released on a bond of Sh3 million and one surety or a cash bail of Sh500,000.

Mr Muthama, through his company, could have earned much of the money through what appears to be a case of influence peddling secured by detailed contracts, one of which the Sunday Nation has seen. 

The Maendeleo Chap Chap Party MP declined our numerous requests for comment. He neither picked our calls nor did he reply to the questions we raised to him via SMS and WhatsApp on his two mobile phone lines. 

In November 2013, his company signed an agreement with CMC di Ravenna, Southern Africa branch, to provide “consultancy services” to the Italian firm as it prepared to bid for tenders for construction of Itare Dam, which is under the Rift Valley Water Services Board, and Ruiru II Dam under the Athi Water Service Board.

According to the 10-page agreement dated November 26, 2013, and titled “Consulting Service Agreement”, Stansha Ltd was to use its best endeavours to ensure that CMC di Ravenna won the tender.

The consultancy fee was to be paid every two months on pro-rata basis as the payments came in from the Rift Valley Water Services Board. The fee included taxes and other government duties and levies.

The agreement was signed by Mr Muthama and a Ms Lili Rono, as the CEO and the director of Stansha Ltd, respectively. Mr Porcelli signed as the CEO of CMC di Ravenna, Southern Africa branch.

In July last year, Mr Porcelli was promoted to be the overall CEO of the giant Italian firm whose headquarters is in Ravenna, Italy, but which has branches across the globe.

While he was the CEO of the company’s Southern Africa operations, Mr Porcelli signed on projects in Sub-Saharan Africa, including Kenya, where his signature appeared on the contracts of not only the Itare, but also the Kimwarer and Arror dam projects.

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In July, Director of Public Prosecutions Noordin Haji issued a warrant of arrest for Mr Porcelli after he failed to appear in court to enter a plea on corruption charges in relation to Kimwarer and Arror dams.

“Porcelli is a fugitive,” DPP Special Prosecutor Taib Ali Taib told a Nairobi court. “The Italians think they can break the law and get away with it, contemptuously. Don’t allow it, your honour.”

In February 2014, two months after Stansha Ltd and CMC di Ravenna signed the consultancy agreement, the Rift Valley Water Service Board advertised for bids for the construction of Itare Dam, which was eventually awarded to the Italian firm at a cost of Sh28.9 billion.

Water and Sanitation Cabinet Secretary Simon Chelugui has told detectives investigating the matter that the actual payments to the contractor made until December 2018 amounted to Sh11 billion.

According to our calculations, Mr Muthama’s firm ought to have received an estimated Sh332 million from the Italian firm, being the three per cent of contract sum, as stipulated in the consultancy agreement.

As per the contract between CMC di Ravenna and Stansha Ltd, the MP’s firm would have received about Sh840 million, being three per cent of the total contract sum, which is nearly Sh29 billion.

However, the party was cut short after the company filed for bankruptcy in a court in Ravenna in December last year, which automatically triggered the termination clause in the contract.

According to the agreement, the contract is deemed cancelled if “either of the parties has become insolvent or bankrupt or has a receiver appointed for its undertaking or assets or goes into liquidation”.

Mr Muthama was headed for another big payday had he delivered the Ruiru II Dam project to the Italian firm, but in August 2014 the Athi Water Services Board awarded the project to a consortium of French firms at a cost of Sh21 billion.

Had he delivered the Ruiru II project, Mr Muthama would have made a cool Sh700 million. In total, he would have earned in excess of Sh1.5 billion in less than five years by simply facilitating CMC di Ravenna to clinch the two tenders.

The rare contract has exposed the murky world of wheeler dealers and how they rake in millions of shillings for acting as brokers, middlemen, contract negotiators — or simply for being at the negotiating table.

In Africa, where corruption is a challenge, American and European firms have lost business to Chinese companies, which are often accused by the West of doing anything to clinch tenders in the continent. 

But Italian firms are now robustly challenging the Chinese dominance, as illustrated by the State visit to Kenya by former Italian Prime Minister Mateo Renzi in mid-July 2015.

What most Kenyans remember from that meeting is a picture of Mr Renzi, appearing to be wearing a bulging bulletproof vest underneath his suit, during a meeting with President Uhuru Kenyatta at State House, Nairobi.

But it was during the two-day state visit that President Kenyatta and Mr Renzi witnessed the signing of a Sh29 billion deal with Italy’s BNP Paribas and Intesa Sanpaolo banks for construction of Itare Dam.

Daly and Inadmar Advocates partner and cross-border commercial contract specialist Shitul Shah said such consultancy contracts as the one between Mr Muthama and CMC di Ravenna are common where foreign companies are seeking contracts in countries that they don’t have firm footing.

“Naturally, they scout for local partners who often happen to be individuals who are well-connected to the system,” he said. On the face of it, he added, it is difficult to conclude whether such deals constitute bribery.

“For that, you would have to dig deeper into the real motive of the contract,” said the lawyer.

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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

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Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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