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{
"id": 876555,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/876555/?format=api",
"text_counter": 23,
"type": "speech",
"speaker_name": "Sen. Murkomen",
"speaker_title": "The Senate Majority Leader",
"speaker": {
"id": 440,
"legal_name": "Onesimus Kipchumba Murkomen",
"slug": "kipchumba-murkomen"
},
"content": "All EPC+F projects have very important components of either bank guarantee or insurance. Why is this important for projects, especially those funded by EXIM Banks in countries such as US, China, Japan, Britain and, in this case, Italy? These banks guarantee or insure the Government and the people of Kenya from losses occasioned either as a result of non-performance, incompetence, delay or insolvency of the contractor. Mr. Speaker, Sir, projects funded by Exim banks (concession loans of developed countries like in this case) come with a condition that the contractor must come from the donor country and as much as possible most of the equipment should come from that country as a measure to promote the export of their products. In the case of this project, the contractor is Italian. Implementation of the two projects will involve utilization of USD277,407,605.50 for the Arorr project and USD224,422,163.92 in the case of Kimwarer Dam. Combined, the projects will cost Kshs63 billion, being the contracts amounts for the Arror and Kimwarer projects respectively from the loan funds, to be used for the construction of the dams and the downstream development of the power, irrigation and water supplies systems. On the other hand, the GoK counterpart funds will be required for meeting costs of resettlement and compensation of Project Affected Persons (PAPs) together with project management, supervision and oversight activities. As per the contracts, implementation duration runs from 28th December 2017 to 27th December, 2022. Mr. Speaker, Sir, one of the conditions for the contractor to take over is that they must receive advance payment from the project financier, with approval of the receiving government. Advance payments, generally, in such projects range between 10 and 25 per cent of the project value. In this case, it was 15 per cent. So far as per the contracts, the contractor was paid an advance payment of US$41,611,140 for the Arror Project in December, 2017; and US$33,663,324.59 in November, 2018. That amounts to almost Ksh7 billion or thereabouts. The payment was to enable the contractor to do mobilization and designs, as contained in the conditions of the contract. Advance payment is a loan to the contractor that will be recovered from future certificates when work is done."
}