On May 18, 2017 former Treasury Permanent Secretary Kamau Thugge authorized a payment amounting to Ksh240 Million to Italian company, CMC di Ravenna, marking the beginning of the infamous Arror and Kimwarer dams scandal.
The payment would trigger a series of payments to the company through Intesa Sanpaolo SPA (London office), that led to the loss of over Ksh21 billion without a single job done.
On July 18, 2017, Thugge also authorized payment of Ksh19 million as commitment fees to Kimwarer Dam to CMC di Ravenna, and an additional Ksh23 million for Arror Dam.
On January 18, 2018, Thugge authorized another payment for Kimwarer Dam also dubbed as commitment fees to the company, amounting to Ksh77 million. Ten days later, on January 29, 1018, another payment also dubbed as commitment fees for Arror was released to CMC di Ravenna amounting to Ksh92 million.
On July 18, 2017, two batches of payments were released from the National Treasury also marked as commitment fees for Kimwarer and Arror dams, amounting to Ksh76 million and Ksh67 million respectively.
During this period, Intesa Sanpaolo Bank in London made at least Ksh13.6 million profit for facilitating fraudulent payments and loan agreements that led to the loss of Ksh67.2 billion from the Kenyan government, according to South African investigator Paul O’Sullivan.
The same case was bound to happen in South Africa, where CMC di Ravenna secured a tender to upgrade Durban Port, where South Africa was set to lose Ksh30.7 billion.
According to an investigation by O’Sullivan, the company which was facing liquidation after being declared bankrupt back at home used dishonest means to win the tender.
A joint venture was formed, CMI Emtateni JV, with CMC di Ravenna holding 1 percent stake, CMI Infrastructures (Pty) Ltd 69 percent, Omame Empowerment 15 percent and Masiny Empowerment holding 15 percent.
However, as it would emerge, CMC di Ravenna would control 100 percent of the business despite a statement that it would have a one percent control.
The company even ‘imported’ 390 Italians to do the job, at the expense of South African natives. As this writer learns, the other companies were to be used as conduits of ill-gotten wealth, at the same time blindfold South African government officials from knowing that CMC di Ravenna was bankrupt.
It was discovered that CMI Infrastructure was a natural person, the current CEO of CMC di Ravenna in Italy, Mr Paulo Porcelli. This meant that CMC di Ravenna held a strong 70 percent stake at the venture.
The same company was able to get CIDB grading eight weeks after its inception, and only a day after submitting its application to CIDB committee.
“We do not believe that a single one of them (companies and directors) will lift a pick or shovel to carry out work at all,” noted O’Sullivan.
A company associated with CMC di Ravenna in South Africa, PG Mavundla, was also found guilty of submitting five fake tax-clearance certificates to CIDB in 2008, 2009, 2010 and 2011.
To win big tenders, the company invoked big projects even if they were cancelled like the South Africa’s Durban Port.
In Kenya, Porcelli is a wanted man following the Arror Kimwarer dam scandal, that has seen Kenya’s Treasury Cabinet Secretary Henry Rotich toppled.