Multi-billion Galana project firm to know fate Tuesday

By K24Tv Team On Mon, 1 Jul, 2019 15:57 | 4 mins read
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    Green Arava, the  Israel company contracted to construct a Sh7.2 billion model farm at Galana Kulalu will know whether it will continue with the project  or not tomorrow.

    Agriculture and Irrigation Cabinet Secretary Mwangi Kiunjuri said the ministry has summoned officials of the company for a meeting at Kilimo House. 

    He said the the meeting with the contractor will enable the ministry to make a concrete decision in terms of ensuring the project does not collapse.

     

     

By Nicholas Waitathu

Green Arava, the  Israel company contracted to construct a Sh7.2 billion model farm at Galana Kulalu will know whether it will continue with the project  or not tomorrow.

Agriculture and Irrigation Cabinet Secretary Mwangi Kiunjuri said the ministry has summoned officials of the company for a meeting at Kilimo House so that they can can shed more light on the ongoing dispute with National Irrigation Board (NIB), the implementing agency for the project.

He said the the meeting with the contractor will enable the ministry to make a concrete decision in terms of ensuring the project does not collapse.

“The contract is still in force, though as the government and employer, we can decide to terminate it and engage another servicer or NIB can fully assume the project,” Kiunjuri added.

More food

The CS, however, noted that so far the project has not collapsed and government is still determined to continue with it in order to produce more food for the country.   

The contract, Kiunjuri explained, can be terminated either through arbitration, or mutual agreement.

“Either of the parties can initiate the arbitration.  If the provided options fail the issue can be aggravated to the diplomatic level between  the two governments,” Kiunjuri said.

Galana Kulalu Food Security project, one of the flagship project of the Jubilee government, was initiated with the objective of ensuring food security following recommendations of a pre-investment and feasibility study conducted in 2013.  

Government’s intention was to establish a 10,000 acres model farm which started in September 2014 and gradual implementation of other phases to 400,000 acres. 

The Israel company stopped working at Galana Kulalu in February this year, citing interference from cartels and payment delay by NIB. The irrigation board has already taken over the project and so far has planted 1,000 acres of maize which it expects to harvest as from August.  

Kiunjuri said NIB and Green Arava have differed over a number of issues and the ministry is seeking solutions to ensure the desire by government to produce more food is realised.

“Recently we formed a committee of various government agencies to look into the challenges facing the project. Last week, I had another meeting with the team to finalise the report,” he said at Galana Kulalu after touring the project.    

“We have brought on board the Presidential Delivery Unit, National Treasury, Ministry of Agriculture, NIB and Attorney General.  The team has been on the ground for the last one month and has prepared a report,” added Kiunjuri. However, the CS said the ministry cannot start implementing the findings before giving the contractor a hearing.

Since the project started in 2014 it has been able to produce 70,742 bags of 90kg of white maize. The company realised its first harvest of 8,575 bags of 90kg in the first planting season, translating to 17 bags per acre.

In the second season of planting, September 2015 to January 2016, 500 acres gave only 3,101 bags of 90kg, translating to six bags per acre. The contractor blamed this poor yield on the El Nino floods.

Between April and October 2016, Green Arava planted on 2,000 acres of land, managing a harvest of 59,066 bags of maize -31 bags of maize per acre. This harvest was widely celebrated as a breakthrough.

However, the celebration did not last long as the communication woes between NIB and Green Arava came to the fore. So far NIB has planted four different early maturing maize crop varieties – Pannar 7m-81, DCK-80-89, DCK, 80-33 and H520 in 1000 acres.  The estimated average yield of the planted varieties per acre is estimated at 32 bags per acre.  

Spending per acre

Last week, NIB top management acknowledged the current dispute with the contractor, saying the disagreement rose after the government questioned some bills. Furthermore, the ministry has also disputed the amount of money Green Arava said it was spending per acre.

The project’s status report indicates that Green Arava spent Sh90,643 per acre, being cost components of diesel, preparing the land, monitoring, engaging casuals and harvesting. But NIB disputes the figures, saying actual estimations cannot exceed Sh50, 079.

“Current crop is tasseling and so far the NIB has spent Sh27,000 per acre and the end of the season in the next two months the cost is expected to reach Sh45,000 per acre,” Kiunjuri said , adding: “Based on raised issues there are irregularities committed bordering on mismanagement and corruption.”

The contractor is further accused of not fulfilling its role as per the contract. For instance, th has installed only 20 centre pivots instead of agreed 24. It was supposed to install machinery of drip irrigation for 4,000 acres but as at now has only been able to connect 1,800 acres.

The project was started in 2012 and was to take 18 months at a cost of Sh14.5 billion but the cost was scaled down to Sh7.2 billion. So far Government has paid Sh5.9 billion plus Sh800million of insurance to the contractor. NIB Chief Executive Officer Gitonga Mugambi said the organisation will continue to scale up the planting area to 3,300 acres which it has taken over from the Israeli contractor in the next two months. 

“Whichever direction the discussions take, NIB is ready and committed to undertake the project in order contribute to food production in the country,” he said. By December, Kiunjuri said, the planting area will have been increased to 5,000 acres and 10,000 by February 2020.