Tag: Auditor-General Nancy Gathungu

Talanta Stadium Construction Cost Inflated By Sh11 Billion, Audit Reveals

Kenya’s most expensive sporting infrastructure project has been shaken to its foundations after Auditor-General Nancy Gathungu tore open the books of the Talanta Sports City Stadium and found a jaw-dropping Sh10.85 billion gap that nobody in government can explain.

In a damning new audit of the Ministry of Defence accounts for the 2024/25 financial year, Gathungu reveals that while the National Treasury had approved Sh35 billion for the 60,000-seater stadium in Nairobi, the contract that was quietly signed with a foreign contractor on May 26, 2024, stood at a colossal Sh45.85 billion. That is Sh10.85 billion more than what Parliament was told the project would cost, and not a shilling of that difference has been accounted for.

“This is against a contract amount of Sh45.85 billion, resulting in an unsupported price variation of Sh10.85 billion,” the audit states, in language that is measured but devastating.

“Talanta Sports City contracting is one of those greatest heists to ever happen under the Kenya Kwanza regime.” –Justin Muturi, former Attorney-General

The scale of the scandal becomes even clearer when placed in context. The Sh10.85 billion that has apparently evaporated into thin air is enough to build 9.5 kilometres of the Rironi-Mau Summit dual carriageway. It could fund the primary school education of 4.8 million Kenyan children for an entire year, or keep 487,000 secondary school students in class over the same period. The Kenya Kwanza administration has spent years telling Kenyans it has no money for classrooms and textbooks, yet here, buried in a stadium contract, is enough to educate nearly five million children.

AG Kept in the Dark

What makes the scandal all the more explosive is what the auditor found missing from the contract file: any sign that then-Attorney-General Justin Muturi had ever been asked to clear the deal. Section 134 of the Public Procurement and Asset Disposal Act is unambiguous. Every government contract worth more than Sh5 billion must pass through the AG’s office before it is signed. The Talanta contract, at Sh45.85 billion, was nearly ten times that threshold.

Muturi told reporters this was no accident. “Clearance was never sought from me,” he said bluntly. “Talanta Sports City contracting is one of those greatest heists to ever happen under the Kenya Kwanza regime.”

Muturi said he had raised alarm when he noticed that the Ministry of Sports had been stripped of its procuring role in favour of the Ministry of Defence, a move that looked, from the outside, like deliberate bureaucratic maneuvering to sidestep normal oversight channels. “I told them that this is against the procurement law, which requires the clearance of the Attorney-General for any contract above Sh5 billion,” he said. No one listened.

Procurement Laws Ripped Apart

The illegality does not end with the missing AG clearance. The Auditor-General found that the contract was awarded through a direct procurement method, bypassing competitive tendering entirely. Kenya’s procurement law demands that open tendering be the default. Direct procurement is only permitted under a narrow set of exceptional circumstances, such as war, a natural disaster, or when a supplier holds exclusive rights over the goods or services required.

None of those conditions applied to a football stadium. “The contract was awarded through a direct procurement method which did not meet competitive procurement and direct procurement criteria demanded by the Public Procurement and Asset Disposal Act of 2015,” the audit report states. The contract was handed to China Road and Bridge Corporation (CRBC), a subsidiary of the majority state-owned China Communications Construction Company (CCCC), without Kenya going to the open market.

Half Built, Barely Paid

As of June 1, 2025, the Talanta Sports City was only 44.54 percent complete, with 15 months still to run before the expected completion date. Yet, of the Sh45.85 billion contract, only Sh2 billion had been paid to the contractor, a mere 4.5 percent of the total sum.

Talanta Stadium.

Under the contract terms, Kenya will be charged interest at three percentage points above the Central Bank of Kenya’s average base lending rate on any payments that fall overdue. The meter is already running.

To manage the mounting payment obligations, the government on July 22, 2025, signed a deed of assumption of payment obligations.

Under the arrangement, Defence Principal Secretary Patrick Mariru, Sports Kenya and a Trustee effectively transferred the duty of making future payments to the Trustee.

The project is being financed through a bond listed on the Nairobi Securities Exchange, backed by the Sports and Arts Social Development Fund (SASDF), with repayments estimated at Sh3.4 billion every six months. Mariru did not respond to requests for comment by press time.

Sh100 Billion by the Time It Is Done?

The audit findings arrive hard on the heels of warnings from Kiharu MP Ndindi Nyoro, a former chair of the National Assembly’s Budget and Appropriations Committee, who has claimed that by the time the interest costs, penalties and bond servicing are fully settled, Kenya could end up paying in excess of Sh100 billion for a stadium whose contract value is Sh45.85 billion.

Nyoro was removed from the powerful budget committee following political friction with President William Ruto.

Gathungu has warned that only a special audit will be able to determine the true value for money from the project, as the full details of the funding model were never provided to her office.

“The full details of the model have not been provided, hence the need for a special audit to determine the true value for money in the achievement of the project,” the audit states.

The 60,000-seat Talanta Sports City was groundbroken on March 1, 2024, at the Jamhuri Grounds along Ngong Road in Nairobi.

It is one of the key venues Kenya is preparing for the 2027 Africa Cup of Nations, which the country will co-host with Uganda and Tanzania. President Ruto has promised the stadium would be renamed the Raila Odinga International Stadium upon completion.

With CAF already issuing urgent safety upgrade directives and giving Kenya a three-month deadline to address critical infrastructure concerns at its AFCON venues, the political and financial scandal now engulfing the country’s flagship stadium project could not have come at a worse time.

February 23, 2026
AUDIT EXPOSES INEQUALITY IN STAREHE SCHOOLS: PARENTS BLED DRY AS FEES HIT Sh300,000 AGAINST Sh67,244 CAP

A damning audit by the Office of the Auditor General has torn open a festering scandal inside two of Kenya’s most revered schools, revealing that Starehe Boys Centre and Starehe Girls Centre charged parents fees as high as Sh300,000 in a single academic year, nearly five times the government-mandated cap of Sh67,244.

The report, prepared by Auditor General Nancy Gathungu, paints a deeply troubling picture of a governance crisis at institutions founded on the noble mission of educating Kenya’s most disadvantaged children. Far from honouring that legacy, the schools appear to have quietly turned what was once a refuge for orphans and the destitute into a fee-gouging operation that locked out the very families they were built to serve.

The numbers tell a brutal story

Starehe Boys Centre led the charge in overcharging. The audit established that in the 2024 academic year, the school quoted fees ranging from Sh140,000 to Sh300,000 to parents. The Ministry of Education had capped fees for Category A boarding schools at Sh67,244. Even at the lowest end of the range at Starehe Boys, parents were paying more than double what the law allowed.

Starehe Girls Centre was no better. The school charged a flat Sh150,000, which was nearly three times the Sh53,554 that had been recommended by the Ministry of Education for its category. The Auditor General’s office calculated that each girl at the school was overcharged by up to Sh96,446 in a single year. In total, Starehe Boys Centre alone raked in over Sh92 million from parents during that period.

The school’s management attempted to frame the fee disparity as a voluntary arrangement. However, the Auditor General rejected this defence outright, finding that the school had entered into individual fee agreements with parents at wildly different rates without ever obtaining the legally required written approval from the Cabinet Secretary for Education, as mandated by Section 3.2 of Ministry of Education Circular Number MOE-HQS/311313.

A school without a principal for five years

What makes the findings even more alarming is the state of governance uncovered alongside the fee irregularities. At the time of the audit, Starehe Boys Centre had been without a substantive principal for close to five years. The school was also short 28 teachers, yet the report noted there was no indication that the Board of Management had made any effort whatsoever to fill those positions.

This is not a minor administrative oversight. A school that cannot retain or appoint a head and is severely understaffed is a school that is failing its students at every level, regardless of how much their parents are paying.

At Starehe Girls Centre, the situation was equally concerning. The school was operating without parental representation on its governing board, and the board itself had no one to hold it accountable. Parents, the very people bearing the financial burden, were systematically sidelined from the decision-making processes that governed the schools their children attended.

The founding promise, betrayed

Starehe Boys Centre was established in 1959 by Dr Geoffrey William Griffin as a rescue centre for orphans displaced during the Mau Mau uprising. The school’s founding charter was built on a simple promise: to educate boys in need. For decades, the institution operated on a means-tested model, with at least 70 percent of its students reportedly receiving education at no cost and the remainder at a reduced rate. The school’s very name, drawn from the Swahili word for peace and comfort, signified a safe harbour for children with nowhere else to turn.

Starehe Girls Centre, founded in 2005 in the same spirit, was established to provide quality education to bright but financially disadvantaged girls from across Kenya. Both schools continue to receive government funding through capitation grants and have teaching staff paid for by the State through the Teachers Service Commission.

The audit findings therefore carry a significance beyond simple financial irregularity. They raise a fundamental question about whether these institutions have drifted so far from their charitable origins that they no longer deserve the trust and resources the State continues to pour into them.

A pattern of defiance

The Starehe schools’ disregard for Ministry of Education directives is not a new phenomenon. Years before this audit, both institutions were already at odds with the government over governance, admissions, and autonomy. The schools have repeatedly pushed back against the establishment of statutory boards of management, resisted principals posted by the Teachers Service Commission, and insisted on running their admissions independently of national systems.

This pattern of defiance was back in sharp focus just weeks ago, when the Ministry of Education placed 632 Grade 10 learners at Starehe Boys and Starehe Girls through the national senior school placement portal. The two institutions rejected the majority of those students, with 317 turned away from Starehe Boys and 315 from Starehe Girls. The schools applied their own internal criteria, leaving hundreds of parents who had believed their children secured a spot scrambling to find alternative placements at the last minute.

Education Cabinet Secretary Julius Ogamba confirmed that the Ministry had allowed the rejections to stand, a decision that drew sharp criticism from parents who felt the government had caved to institutional pressure.

The Starehe scandal does not stand alone.

The same Auditor General’s report flagged a wider pattern of fee violations and governance failures across multiple top schools in Kenya, including Loreto Kiambu Girls High, Shimo la Tewa, Thika High School, and several others.

In some cases, parents were asked to contribute as much as Sh1.2 million for school-initiated projects.

The audit also exposed data manipulation. At Thika High School, for instance, the number of students recorded on the government’s National Education Management Information System differed from County Director of Education records by 316 students, a discrepancy that resulted in underfunding of nearly Sh2.6 million.

These revelations come at a particularly sensitive time. Kenya is in the middle of one of the most consequential education transitions in its history, with over 1.1 million learners moving into the new senior school system under the Competency Based Education framework. The government has capped boarding fees at Sh53,554 nationwide and promised strict enforcement. If the institutions flagged by the Auditor General are allowed to continue flouting those directives without consequence, the promise of equal access to quality education may remain exactly what critics have long feared it to be: just a promise.

The questions that must be answered

The Ministry of Education has warned principals against imposing unauthorized fees and has vowed administrative action against non-compliant schools. But words from Jogoo House have not historically translated into action when it comes to institutions like Starehe, which have operated with remarkable independence despite their dependence on public funding.

The Auditor General’s report must not gather dust in parliamentary archives. Accountability demands that the Ministry of Education act swiftly, not only to recover the funds overcharged to Starehe parents but to enforce a clear and visible line: institutions that receive State resources must play by the State’s rules. No school, however storied its history or impressive its alumni list, should be above the law.

The children of Kenya deserve better.

February 3, 2026
Audit Reveals Massive SGR Ticketing Fraud as China Loan Penalties Soar to Sh34 Billion

Kenya Railways faces double crisis as passengers exploit weak controls while Chinese debt obligations spiral out of control

Kenya Railways Corporation is grappling with a devastating financial crisis as a damning audit report exposes widespread fraud in the Standard Gauge Railway (SGR) ticketing system while loan penalties from China continue to balloon to an astronomical Sh34.1 billion.

Auditor General Nancy Gathungu’s latest report for the financial year ending June 2024 has laid bare a system riddled with loopholes that passengers are systematically exploiting to travel without paying, while the corporation simultaneously buckles under the weight of unpaid Chinese loans and mounting legal battles.

Passengers gaming the system

The audit reveals shocking weaknesses in SGR’s revenue collection mechanisms that have created a paradise for fare dodgers.

Despite employing revenue inspectors, overcrowded commuter trains make it nearly impossible to verify that all passengers have valid tickets.

“Commuter service trains are usually congested, making it difficult for inspectors to confirm that all passengers were receipted,” the report states, highlighting how the chaos of packed carriages has become a cover for systematic fare evasion.

The fraud extends beyond simple overcrowding. Passengers have discovered multiple ways to manipulate the ticketing system:

Receipt Recycling Scheme: Used tickets are being dropped into open trays at stations, where unscrupulous passengers retrieve them for reuse during evening services or the following day. The corporation’s failure to properly safeguard or destroy used receipts has created an underground economy of recycled tickets.

Mobile Money Manipulation: The audit exposes critical flaws in mobile payment processing. Cashiers prioritize cash-paying customers, leaving mobile money users to wait – a delay that many exploit by alighting at their destinations before being receipted. Even more alarming, passengers are gaming the system by showing fake M-Pesa messages to cashiers who simply record reference numbers read aloud by customers.

“Considering that there are instances where dishonest people tamper with M-Pesa messages, chances of the cashier recording doctored messages could not be ruled out,” Gathungu warns in her report.

The audit identifies a perfect storm of internal control failures that have enabled this fraud to flourish.

The same cashiers who issue tickets are responsible for checking them, creating opportunities for collusion.

Meanwhile, supervisors and inspectors are frequently absent from trains, leaving the system essentially unmonitored.

These control weaknesses have resulted in confirmed revenue losses of Sh133.8 million from the Meter Gauge Railway alone, with the SGR losses likely far higher given the scale of the fraud described.

China debt crisis deepens

While passengers exploit ticketing loopholes, Kenya Railways faces an even more existential threat from its Chinese creditors.

The corporation’s failure to service its massive Sh646.16 billion loan from China Exim Bank has triggered punishing penalties and interest charges now totaling Sh34.1 billion.

The breakdown is staggering: Sh5.3 billion in penalties and Sh28.85 billion in accumulated interest – costs that Gathungu emphasizes “could have otherwise been avoided” if the loans had been paid on schedule.

“These penalties expose the public to avoidable expenditures that could otherwise have been avoided. This expenditure is not a proper charge to public funds,” the Auditor General states bluntly.

The financial crisis extends beyond Chinese loans. Kenya Railways faces pending lawsuits worth Sh27.97 billion and has provided guarantees on behalf of the corporation amounting to Sh166.8 million.

Combined with the Chinese debt penalties, the corporation’s total contingent liabilities present an existential threat.

“The Corporation is at risk of operations interruption should the contingent liabilities crystallize,” Gathungu warns, painting a picture of a railway system on the brink of collapse.

Operational mismanagement

The audit also reveals broader operational failures, including Sh1 billion in long-outstanding prepayments to suppliers such as Kenya Power, Nairobi City Government, and other state agencies that have remained unpaid for over a year without satisfactory explanation.

The convergence of systematic passenger fraud and mounting Chinese debt obligations presents Kenya Railways with a crisis that threatens the viability of the entire SGR project.

While passengers exploit weak controls to travel for free, the corporation hemorrhages money through avoidable penalties and interest charges that now exceed Sh34 billion.

The audit findings raise fundamental questions about the sustainability of Kenya’s flagship infrastructure project and the competence of its management.

With operations at risk of interruption and public funds exposed to massive liabilities, urgent reforms are needed to salvage what remains of the SGR’s financial viability.

The irony is stark: as ordinary Kenyans find increasingly creative ways to avoid paying train fares, their government faces the crushing reality of unpaid billions to Chinese creditors – a financial double blow that could ultimately derail the entire railway project.

July 22, 2025
Unpacking the Sh540 Million Textbook Scandal in The Ministry of Education

A damning audit report has laid bare the extent of financial mismanagement and systematic failures that have plagued Kenya’s textbook distribution system, revealing how over half a billion shillings may have been lost through poor planning, irregular deliveries, and outright negligence within the Ministry of Education.

The special audit conducted by Auditor-General Nancy Gathungu paints a troubling picture of how public funds meant to ensure every Kenyan child has access to learning materials have instead been squandered through a web of administrative incompetence and questionable practices spanning four years from 2020 to 2024.

At the heart of this scandal lies a fundamental breakdown in accountability.

The State Department for Basic Education disbursed Sh27.9 billion to the Kenya Institute of Curriculum Development for textbook procurement, yet KICD’s records show receipts of Sh28.2 billion, creating an unexplained variance of Sh378 million that no one seems able to account for.

This discrepancy alone should have triggered immediate investigations, yet it appears to have gone unnoticed or deliberately ignored.

The audit’s findings reveal a system so dysfunctional that it borders on the absurd.

Schools received textbooks for subjects they don’t teach, while others were left without basic learning materials despite payments being made to publishers.

Some institutions received excess books worth millions while their neighboring schools went without, creating an inexplicable distribution pattern that defies logic and suggests either gross incompetence or deliberate manipulation.

Auditor-General Nancy Gathungu

The numbers tell a story of systematic failure. A total of 394 secondary schools, 94 junior secondary schools, and 182 primary schools received excess textbooks valued at Sh90.8 million.

Meanwhile, 183 secondary schools, 233 junior schools, and 253 primary schools never received books worth Sh41.4 million despite these being paid for.

This represents a catastrophic failure in planning and execution that has directly impacted thousands of learners across the country.

Perhaps most troubling is the discovery that 118 secondary schools, 225 junior schools, and 26 primary schools received textbooks worth Sh30.3 million for subjects they don’t offer.

This suggests either a complete lack of communication between KICD and schools or a deliberate attempt to inflate delivery figures while ignoring actual educational needs.

The audit also uncovered delivery delays spanning from three months to over three years across 76 different order numbers, indicating that even when books were eventually delivered, they often arrived too late to be useful for the academic year they were intended for.

Such delays not only waste public resources but also undermine the entire educational process.

Adding to these concerns is the revelation that 110 schools failed to maintain proper records of textbooks and instructional materials received.

This violation of Basic Education Regulations creates a perfect environment for corruption and makes it impossible to track where resources actually end up. Without proper record-keeping, there’s no way to ensure accountability or prevent theft and misappropriation.

The audit report highlights fundamental weaknesses in the procurement process itself.

KICD failed to include textbook purchases in its procurement plans, while the State Department for Basic Education never disclosed the criteria used for transferring funds or the rate per learner for textbooks.

This lack of transparency makes it impossible for oversight bodies to monitor the process effectively.

The broader implications of this scandal extend far beyond the immediate financial losses.

In a country where access to quality education remains a significant challenge, the mismanagement of textbook distribution directly affects learning outcomes.

Children in schools that received no books or inappropriate materials are being denied their constitutional right to education, while excess books sitting unused in other schools represent missed opportunities for learning.

This scandal also raises serious questions about the effectiveness of Kenya’s public financial management systems.

How can such massive discrepancies and irregularities persist for four years without detection? Where were the internal controls, oversight mechanisms, and accountability structures that should have prevented or quickly identified these problems?

The timing of this audit report is particularly significant as it comes amid broader concerns about corruption and mismanagement in various government sectors.

The textbook scandal adds to a growing list of procurement irregularities that have cost taxpayers billions of shillings while undermining service delivery.

For parents and educators who have watched helplessly as children struggle without adequate learning materials, this audit confirms what many have long suspected – that the system designed to support education has been failing them.

The loss of Sh540 million could have provided textbooks for thousands of additional students or improved educational infrastructure across the country.

The scandal also exposes the disconnect between policy makers and ground realities.

While officials in Nairobi were disbursing billions of shillings, teachers in rural schools were conducting lessons without basic textbooks, and students were sharing the few available books among large classes.

Moving forward, this audit report must serve as a catalyst for comprehensive reforms in how educational resources are procured and distributed.

The Ministry of Education needs to establish clear accountability mechanisms, improve record-keeping systems, and ensure that distribution patterns align with actual school needs rather than arbitrary decisions made in boardrooms.

The Auditor-General’s findings demand immediate action from relevant authorities.

Those responsible for this mismanagement must be held accountable, and systems must be put in place to prevent similar occurrences in the future.

Most importantly, measures must be taken to ensure that the primary victims of this scandal – Kenya’s children – receive the educational materials they desperately need.

The Sh540 million textbook scandal represents more than just financial mismanagement; it’s a betrayal of Kenya’s commitment to providing quality education for all.

As investigations continue and accountability measures are implemented, the focus must remain on ensuring that such systematic failures never again compromise the educational prospects of Kenyan children.

July 19, 2025
Audit Uncovers Sh13.26 Billion in Suspicious County Payment Cancellations

Auditor General Nancy Gathungu has unearthed Sh13.26 billion worth of cancelled suspicious payments by fifteen counties for more than 15,000 suppliers, raising concerns over the diversion of public funds meant for verified contractors.

According to Gathungu, the funds were withdrawn from county revenue accounts and approved for payment by the Controller of Budget (COB) and the National Treasury, but were later cancelled without explanation, despite suppliers having been vetted and confirmed as legitimate.

The audit reveals that these cancellations, which largely took place towards the end of the financial year in June 2024, are partly due to delayed disbursements from Treasury, but the diversion of funds for unapproved transactions is also a significant concern.

The cancelled transactions were deemed legitimate and had undergone scrutiny by the COB before being approved for payment.

“Further, the voided payments had not been disclosed as pending accounts payable and utilisation of funds which were initially meant to pay the voided transactions was also not explained,” reads the audit, citing Kajiado County as an example.

“In the circumstances, the funding may have been utilised to finance transactions that were not approved by the COB.”

Kisumu County led the pack, with 4,127 cancelled transactions worth Sh2.67 billion, followed by Kajiado (1,922 transactions worth Sh2.28 billion) and Busia (transactions valued at Sh2.16 billion).

Nyandarua and Siaya counties also saw high numbers of voided payments, contributing to 71 per cent of all cancelled transactions.

The audit also highlighted that a significant number of cancellations took place in June 2024, with Busia County reporting that 36 per cent of its voided transactions, amounting to Sh772,602,862, were cancelled during this period.

“The highest voided transactions were in June, 2024, amounting to Sh772,602,862 or 36 per cent. No explanation was provided on why the payments were voided after being approved by the COB,” Gathungu said.

Kisumu, Nyandarua, Kajiado and Siaya were the top four counties responsible for 71 per cent of all cancelled transactions by value and volume.

These counties also represented 63.3 per cent of the total value of the voided transactions.

COB Margaret Nyakang’o expressed concern over the ongoing diversion of funds, pointing out that many suppliers, who had been approved for payment, were left unpaid as counties used the funds for other transactions.

“Many of the pending bills are suppliers who have been listed for approval of their payments, but after money is availed to counties and it gets to payment, the counties fail to pay them and make payments to different suppliers who had not been approved,” Nyakang’o said in an interview with Nation.

Nyakang’o further explained the limitations her office faces in tracking these cancellations. Once transactions are approved by the COB, there is no way for her office to determine whether those transactions are subsequently voided, unless complaints arise from the affected suppliers.

“After I approve transactions, I have no way of establishing if they have been voided, until complaints emerge from suppliers later that some transactions which had been approved were not paid,” she said.

Meanwhile, Nyakang’o revealed that the Controller of Budget and the Central Bank of Kenya (CBK) have developed a new system to track all public transactions on the Integrated Financial Management System (IFMIS) platform. The system, set to roll out on April 22, 2025, will allow both CBK and the COB to monitor transactions, providing greater transparency in the management of public funds.

“The system was to kick off on April 22, 2025, but Treasury has indicated that IFMIS is not ready yet. The CBK and COB are ready for this system and we are only waiting for Treasury,” Nyakang’o said.

The new platform aims to prevent the upload of unapproved transactions, ensuring that funds are only used for verified suppliers and contractors.

The ongoing audit raises significant questions about the accountability and transparency of county governments in managing public funds, with taxpayers left wondering how billions of shillings meant for legitimate suppliers were misdirected.

April 21, 2025
Kenya Bleeds Sh285 Million as Chinese Firm Profits from Delays

Kenya’s taxpayers are footing the bill for a stalled irrigation project while a Chinese firm cashes in on delays.

In a damning audit, the government paid Sh214.8 million in “idle time” and another Sh70 million in interest—all to Sino Hydro Company Limited, the contractor behind the Lower Nzoia Irrigation Project.

As communities wait for promised farming support, the project’s costs spiral and deadlines shift.

The government blames delayed World Bank funds, but behind the excuses lies a troubling pattern of poor planning, mismanagement, and a Chinese firm profiting from government inefficiency.

Despite spending billions, farmers in Lower Nzoia are yet to receive the irrigation services that were meant to boost food production and economic resilience in the region. [Photo: Courtesy]

Chinese Firm Paid Sh285 Million for Doing Nothing as Kenyan Taxpayers Foot the Bill

Kenya paid a Chinese firm a staggering Sh285 million in the 2023/2024 financial year—yet not for work done, but for doing nothing.

The Auditor-General’s latest report reveals that Sino Hydro Company Limited received Sh214.8 million for “idle time” and Sh70 million in interest due to government delays in releasing project funds.

Idle time refers to the period when contractors cannot work because of delays caused by the hiring party—in this case, the Kenyan government. Essentially, taxpayers paid the Chinese firm for keeping its machines and workers on standby.

Taxpayers Suffer While Promised Irrigation Project Stalls

The Lower Nzoia Irrigation Project, which straddles Siaya and Busia counties, was launched in June 2018. It aimed to provide irrigation and drainage to 12,600 farmers over 10,000 acres.

Initially, the project was set to end in June 2021. However, it has now been extended to May 2025 due to repeated delays.

Auditor-General Nancy Gathungu flagged the government’s failure to disburse funds on time as the main cause of this financial wastage.

She noted that delays in counterpart funding from the government and insufficient World Bank financing had directly contributed to the problem.

In her report, she wrote:

“The government has gone at a loss of Sh70,072,392 through payment of interest to the contractor resulting to increased project costs and the value for money may not be realised.”

By June 2024, total losses linked to these delays had reached Sh494.2 million. While money leaks through interest and idle time charges, the intended beneficiaries—local farmers—remain in limbo.

Where Did the Money Go?

During the 2023/2024 financial year, the project was allocated Sh3.35 billion. However, only Sh1.47 billion was spent—just 53% of the planned amount. The National Irrigation Authority blamed the underspending on the slow release of funds by the government.

Of the Sh1.39 billion actually spent, only Sh697 million went to construction and civil works. Shockingly, Sh285 million—nearly 41% of that budget—was swallowed by idle time and interest payments to the Chinese firm.

This raises serious questions about project management and accountability.

Delays Trigger Further Costs

The situation worsened because of delayed land acquisition. A letter from project management dated December 5, 2023, revealed that the National Land Commission had not acquired necessary land in time. This resulted in claims from the contractor for both cost escalations and time extensions.

The knock-on effect: taxpayers are punished twice—once for the cost of delays and again through stalled benefits.

Despite spending billions, farmers in Lower Nzoia are yet to receive the irrigation services that were meant to boost food production and economic resilience in the region.

Mismanagement or System Failure?

The government’s explanation blames external financing delays. But that excuse has worn thin. With four years of missed deadlines and rising costs, the pattern points to systemic inefficiencies in project oversight and financial planning.

Why is a foreign contractor being paid millions for inactivity while Kenyan farmers wait for relief? Why has land acquisition not been prioritized, despite being a known requirement from the start?

Time to Demand Accountability

The Lower Nzoia case is not an isolated incident. It mirrors a wider issue in Kenya’s public projects: poor planning, delayed execution, and rising costs—often to the benefit of foreign contractors like the Chinese firm in question.

The Auditor-General’s report is clear: nearly half a billion shillings has been lost due to project delays. If Kenya hopes to make development projects count, it must start holding officials and contractors accountable—not rewarding them for failure.

April 11, 2025
Pesaflow Among Shadowy Firms Siphoning Billions From eCitizen

Shadowy firms have pocketed over Ksh 1.45 billion through Kenya’s eCitizen platform, sparking concerns about their grip on government revenue collection.

Pesaflow, a private company authorized to collect payments for government services, bills the state between Ksh 100 million and Ksh 200 million monthly.

This amounts to an estimated Ksh 2.4 billion annually. Yet, details about its ownership, contracts, and operations remain shrouded in secrecy.

The Rise of Pesaflow and Its Associates

In 2017, amid a legal tussle over control of mobile money wallets, Pesaflow emerged as a key player in processing payments for eCitizen.

Before Pesaflow’s involvement, Webmasters Kenya had contracted Goldrock Capital Ltd. to manage funds from eCitizen users for the government. A fallout led to Goldrock’s removal, paving the way for Pesaflow’s appointment.

Pesaflow operates alongside Webmasters Kenya and Olivetree Limited, forming a consortium linked to software developer James Ayugi.

While Webmasters Kenya claims intellectual ownership of eCitizen, the government previously stated that the International Finance Corporation (IFC) handed over the portal.

Ownership and Operations in the Shadows

Official records reveal that Pesaflow’s largest shareholders, Evid Araka Sibi and Frank Lawrence Ochieng Weya, each hold 3,000 shares.

Other stakeholders include Charles Wambani Sewe and Larry Ochleng Agoro, each owning 2,000 shares. All are linked to Webmasters, suggesting a possible silent takeover.

Despite these connections, Mr. Ayugi has declined to explain his relationship with both Webmasters and Pesaflow.

He maintains that Webmasters handles technology, Pesaflow manages payments, and Olivetree Limited oversees communication services, such as bulk SMS alerts.

Auditor-General Raises Red Flags

Auditor-General Nancy Gathungu has flagged Pesaflow’s role, questioning its control over eCitizen without a proper backup system.

She also criticizes the Ksh 50 convenience fee imposed on Kenyans seeking digital services, calling it unjustified.

Dependence on Private Vendors

The Auditor-General warns that the government heavily relies on private vendors for critical eCitizen functions.

Over 15,000 public services listed on the portal could be compromised in a cyberattack. Support services are also under private control, with government agencies resorting to WhatsApp for assistance.

Lack of Transparency and Oversight

The audit reveals that eCitizen’s helplines and email correspondence are managed by the vendor, with no clear service-level agreements in place.

This lack of transparency and oversight raises concerns about the security and reliability of the platform.

In conclusion, the involvement of shadowy firms in managing eCitizen raises significant concerns about transparency, security, and the government’s reliance on private entities for critical public services. Addressing these issues is crucial to ensuring the integrity of Kenya’s digital service delivery.

February 28, 2025