How crooked profiteers took Galana Kulalu project down the drain
When they campaigned for the 2012 general election, Uhuru Kenyatta and William Ruto promised to put a million acres of land under modern irrigation “within five years” in Galana Kulalu. But unfortunately, the Galana Kulalu project turned out to be a spectacular fiasco.
We can piece together what went wrong from the various documents on the project now that President Ruto is keen to pour some more money into it.
We may have learned some kick-back and procurement lessons. But, perhaps, we have not.
Parliament was right to question why Galana Kulalu had consumed Sh14 billion for only 10,000 acres – meaning that every acre consumed Sh1.4 million and produced only 22 bags of maize!
Galana Kulalu was put in place during the tenure of then Cabinet Secretary Felix Koskei, now head of Public Service, and was deemed to be the answer to Kenya’s perennial shortage of maize and the cost of the staple crop.
But with all its promises, it has become our white elephant, the same way Bura Irrigation Scheme has become the playground for profiteers since the World Bank-financed project went south in the 1990s.
Galana Kulalu copied the bad manners of Bura Irrigation which was to irrigate 12,000 acres, but only about 3,000 acres are under use. For instance, in 2019, some Sh1.8 billion was set aside to rehabilitate the Bura project, but by the time the contract period ended, only 12 per cent of the work had been completed.
When questions were first raised on Galana Kulalu, Mr Koskei called a Press Conference on August 16, 2014 and announced that an Israeli firm would sign a contract to build a 10,000-acre pilot farm. We were told that this would reduce Kenya’s reliance on rain-fed agriculture and reduce food prices. We also know that on April 7, 2014, the then National Irrigation Board entered a lease with Agriculture Development Corporation (ADC), which owns the land, to lease 20,000 acres of land at the cost of Sh480 million. The current National Irrigation Authority has contested the terms of that agreement. It was never made clear why the Irrigation Board was leasing 20,000 acres while it only needed 10,000 acres for the pilot project. Who was to use the extra 10,000 acres and, more importantly, why was the government taking a loan to lease its land?
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On August 20, 2014, the National Irrigation Board signed a project contract with Green Arava Limited, the Israeli firm, and the site was handed over on September 11, 2014. This contract was single-sourced, meaning that Kenyans did not carry out competitive bidding – or get the best pricing. Nobody has ever explained why we single-sourced this project and whether it was value for money.
Sh14.5 billion
The projection was that construction, installation of irrigation infrastructure, and testing systems would cost Sh14.5 billion. During his Wednesday Press interview, President Ruto admitted and was correct that Galana Kulalu was a scam. But he was shy to admit that it was poorly procured from inception and that he and Uhuru Kenyatta owe Kenyans some explanations.
National Irrigation Authority (NIA) communication manager Mr Daniel Nzozo (second left) speaks to journalists during a visit to the Galana Kulalu Irrigation Scheme’s pumping station on November 16, 2022. He says the NIA has done connectivity and land is ready for use to grow crops.
Actually, the project was one of the first heists of Jubilee’s first and second terms and became a campaign issue in 2017. Dr Ruto defended Galana Kulalu then, despite the many questions being asked. So how did the signature food project that was hoped to bridge our maize shortage become a spectacular failure?
We know that the National Irrigation Board took a bank loan of US $ 71,408,014 (Sh8.8 billion) from the Bank of Leumi Israel for the 10,000-acre model farm construction. As the auditor general would later say, the contract signed by NIB was a rip-off and “was not in the interest of Kenyan taxpayers.” Why did Kenyan officials sign a lopsided loan – and what did the Uhuruto government do?
The National Irrigation Board, which was supposed to repay the loan, distanced itself from the negotiations and blamed National Treasury for the shortcomings cited by the auditor general, Dr Edward Ouko. According to NIB in response to Dr Ouko: “The Galana model farm loan was negotiated by the national treasury on behalf of the government of Kenya and not the National Irrigation Board.”
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Those who signed the loan read Clause 6 of the agreement and agreed that the Israeli bank would determine the loan interest “from time to time,” so it would keep shifting. The National Irrigation Board was also to pay the bank for any costs incurred while mobilising the funds for loan disbursement.
The worst part was that NIB was not entitled to contest any payment said to have been paid by the Israeli bank to the contractor and was not supposed to justify its failure to pay its loans as per the contract. That means that Kenya agreed that it would not question any payments made by the bank, which gave the Israeli lender a leeway to charge the Kenyan taxpayer as much as possible without any challenge.
At first, the National Assembly Committee on Livestock and Agriculture opposed the entry of Green Arava. But after its team members toured Israel with President Kenyatta, they changed their hearts.
“We had our reservations as to how the project was designed. Kenyans were not aware of the true picture and essence of the project. However, the misconceptions have been put to rest,” said Mr Kareke Mbiuki during the Israeli tour.
As our Auditor-General later remarked: “The conditions of this loan are in favour of the bank and not the Board.” She also noted that “the repayment of the loan principal and interest are not clearly defined in the loan agreement.” The other question was why a loan that the Treasury took was loaded onto the National Irrigation Board.
It soon emerged that those who negotiated the contract had left many loopholes. The financing agreement was, in the first place, tied to a specific contractor. There was also no mention of transfer of knowledge of manning the infrastructure installed after the contractor had left the site.
Besides the Bank Leumi loan, the National Treasury continued to fund the project and had by 2019 injected some Sh15.3 billion – thus bringing the total investment, including the Bank Leumi loan, to Sh23 billion. It had been projected that with all that investment, the project was to produce Sh1.2 billion worth of maize in the 2019 crop season. But the harvests were dismal – unless the maize was stolen! What we got in 2019, according to records, was maize worth Sh273 million. This harvest was equivalent to a yield of 119,000 bags of maize.
High-profile project
The question that was never answered was why such a high-profile project was producing such low yields. While an acre should produce a yield of 22 bags of 90kgs, Galana Kulalu had in January 2016 produced six bags per acre and in 2015 some 17 bags per acre. By then, General Manager, Daniel Barasa, who was later fired, had promised that they intended to harvest 40 bags per acre. Instead, only one harvest in October 2016, carried out by Green Arava, produced 31 bags per acre.
For tenderpreneurs, Galana Kulalu was like a goldmine outside the media scrutiny. It was where millionaires were minted – and social media was awash with strange tales that were not so far from the truth.
In 2018, a dispute emerged between Green Arava and National Irrigation Authority when the contractor claimed that the then National Irrigation Board owed it Sh1 billion. But the irrigation agency disputed the claim saying that the contractor was stealing from the government.
At the time that the contract was terminated, the contractor had put irrigation systems on 3,300 acres which the new National Irrigation Authority took over.
And that was not the only theft. The Kilifi North MP Owen Baya told Parliament in August 2021 that “government mandarins are actually sub-dividing the land and giving it to themselves without the consent of Parliament as required by the law.” Parliament was told that 300,000 acres had already been grabbed from ADC. These are the allocations that President Ruto has quashed as Galana Kulalu became a grabbers’ paradise. “Right now, people are sub-dividing the ADC Galana Kulalu. We lost the ADC Sabaki in Malindi the same way. It was given to around 2,000 people but the indigenous missed,” said Baya.
Had the dam been built and the stealing gaps sealed, this project would have met our maize deficit of 20 million bags by cultivating 250,000 acres of the Galana-Kulalu. The other half was to come under irrigation once the High Grand Falls Dam some 200 kilometres away was built.
We are once again back to Galana-Kulalu as William Ruto tries to rescue the project from the drain – where they put it. We can only sit back and watch. BY DAILY NATION
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