The government has breathed new life into the long-delayed Keben Dam project in Nandi County, awarding a Sh23.6 billion contract for a redesigned water supply scheme that is far larger than the one first proposed.
The revived project will not only deliver a taller dam and a bigger water treatment plant but will also return under the same financing model that once attracted sharp criticism from Parliament.
Procurement records show that Sinohydro Corporation has been awarded the contract to build the Keben Dam Water Supply Project, ending years of uncertainty over a scheme that was abandoned in 2019 during the administration of former President Uhuru Kenyatta.
The project had stalled following the political fallout between former President Kenyatta and his then deputy, William Ruto, leaving residents who had expected improved access to clean water waiting for years.
The new project will involve the construction of a 43-metre-high earth-filled dam together with a water treatment plant capable of producing 26,715 cubic metres of drinking water every day. The treated water will be supplied to Nandi Town and nearby urban and peri-urban centres.
"The project will primarily benefit the residents of Chesumei, Nandi Central, Nandi East and Nandi South sub-counties, with a particular focus on urban and peri-urban areas," Lake Victoria North Water Works Development Agency said in a disclosure.
The revived project bears little resemblance to the original proposal launched in May 2017. At the time, the government planned to build a 12-metre-high concrete dam and a treatment plant producing 8,000 cubic metres of water daily at an estimated cost of about Sh5.8 billion based on the exchange rate then.
Following the redesign, the dam will now rise to 43 metres and will be built as an earth-filled structure instead of a concrete one. The water treatment plant has also been expanded to produce 26,715 cubic metres each day, more than three times the original capacity.
The larger design has driven the contract price to Sh23.6 billion, almost three times the last publicly disclosed estimate of Sh7.8 billion. The higher cost reflects the expanded size of the storage facility and the increased water treatment capacity rather than inflation alone.
Construction will be undertaken under the Engineering, Procurement, Construction and Financing (EPC-F) model, where the contractor will finance, design, build, operate and maintain the project before selling treated bulk water to the government.
As part of the arrangement, the government will provide the land, secure all statutory approvals and guarantee the purchase of bulk water through "take-or-pay" commitments. It will also provide agreed support measures, including viability-gap funding where necessary.
The project will be governed through a Water Purchase Agreement that outlines how risks will be shared between the government and the investor while making it easier for the contractor to secure financing. The model is intended to reduce the government's immediate spending by allowing the investor to recover its money over the project's operational period.
The financing approach was at the centre of the controversy that brought the project to a standstill seven years ago.
Keben Dam was among 24 dam projects suspended by Parliament in 2019 following concerns raised during the Arror and Kimwarer dam investigations. Lawmakers questioned the EPC-F financing model, saying it could expose the country to inflated costs and poor value for taxpayers.
The National Assembly Committee on Environment and Natural Resources suspended the Sh188 billion programme and directed the Directorate of Criminal Investigations and the Ethics and Anti-Corruption Commission to investigate the procurement process and determine whether proper due diligence had been carried out.
Members of Parliament also questioned delays in compensating affected landowners, arguing that contractors had received large advance payments while communities whose land was required for the projects had not been paid.
The then committee chairman Kareke Mbiuki described the EPCF model as "a complete rip-off", saying it exposed Kenya to expensive borrowing without adequate safeguards.