Dirty waters surround Kenya dam plan

Government accused of using ODA for pork-barrel politics overseas

by Toshi Maeda

A group of lawmakers will arrive in Kenya on Sunday for a two-day inspection tour that is likely to end up endorsing a controversial hydroelectric dam project.

After official meetings next week with Kenyan leaders who openly support the dam, observers say the team will probably recommend pouring an additional 10.6 billion yen in taxpayers’ money into the project.

The Japan-sponsored project has drawn accusations of pork-barreling that benefits Japanese firms and lawmakers at the expense of the environment, human rights and Japanese taxpayers.

These claims are seen as highlighting typical weaknesses of foreign-aid programs — referred to by Foreign Minister Makiko Tanaka recently as the “dark concessions” in her scandal-tainted ministry — and have come at a time when Prime Minister Junichiro Koizumi is seeking ways to reduce official development assistance.

At the center of the controversy is Muneo Suzuki, a Lower House member from the Liberal Democratic Party, who organized the trip. Suzuki heads 16 lawmakers’ groups that have close ties with African nations, including Kenya, and will be joined by four other representatives from the Lower House Foreign Affairs Committee.

Suzuki’s alleged involvement in the dam project has been a focus of Diet deliberations since June with some opposition members pointing to the lawmaker’s alleged promise of aid to the Kenyan government in 1999, his personal connection with one of the successful bidders and his political influence on African countries in general.

The Foreign Ministry backs the project, saying Kenya needs the dam, but some in the opposition and nongovernment organizations see the project as typical of defective ODA projects.

Political giving

The hydroelectric plant in western Kenya dates back to 1985, when Japanese and Kenyan authorities drew up plans to supply 60,000 kilowatts to industrial areas northeast of the site.

The Kenyan government officially asked for an ODA loan in 1995. A 6.9 billion yen loan agreement for the first phase of construction was signed by Tokyo and Nairobi two years later, with the bid going to a multinational joint venture led by Osaka-based Konoike Construction Co.

Suzuki visited Nairobi in August 1999 as deputy chief Cabinet secretary.

He admitted in an interview last month that, out of diplomatic “lip-service,” he promised the Kenyan government his support for a loan agreement for the second phase, at a time when Nairobi was heavy indebted.

A month later, the Foreign Ministry informed Nairobi that it would extend the loan, although the Finance Ministry, questioning Kenya’s ability to pay it back, later suspended the plan.

Tatsuya Yamaguchi, one of the Foreign Ministry officials handling the Kenya project, flatly denied earlier this week the possibility that Suzuki’s 1999 visit to Nairobi in any way influenced the ministry’s decision.

Suzuki likewise denied in the interview any commitment to the project, claiming that the purpose of his visit was to seek the support of Kenyan leaders for a Foreign Ministry official’s UNESCO election bid. Mentioning the project was merely part of the greeting, he said.

The LDP lawmaker also denied exercising any political influence for the benefit of Konoike Construction Co. He legally received 500,000 yen in political donations on three occasions, in 1997, 1998 and 1999, from the firm, according to his disclosed records.

As Suzuki indicated, the dam project was also intended to serve the Foreign Ministry’s interests.

A Foreign Ministry document dated June 29, 1999, which was obtained by The Japan Times, says the project was “critically important from the perspective of the UNESCO election bid.”

Former Ambassador to France Koichiro Matsuura was successfully elected as secretary general of UNESCO the following October.

In another case in which Japan may have used its ODA for political purposes, Greenpeace and other NGOs accuse Tokyo of “having bought the votes of many developing countries” with ODA at an International Whaling Commission meeting held in London in July 2001.

Green project?

Meanwhile, the Foreign Ministry and the Japan Bank for International Cooperation, an affiliate of the Foreign and Finance ministries, have given the Kenyan dam project a special environment-friendly status.

This lowers the loan’s interest rate and makes it a “tied” project, which means only Japanese and Kenyan firms are allowed to join bidding for the second phase. This limitation is to help compensate the burden on Japanese taxpayers, the ministry explains.

A Foreign Ministry mission that visited the project site in June found “nobody calling for the cancellation of the project,” according to its report.

Some Japanese NGOs claim, however, that Japanese authorities don’t recognize the reality in Kenya.

The NGOs say that dust raised by the construction work has caused a range of environmental and sanitary problems, local people who were relocated from the area have not been fully compensated and corrupt officials have cashed in on the project.

In February 2000, two Japanese correspondents reporting on a gathering of local people were arrested for covering an “illegal meeting.” The following December, a Kenyan freelance journalist was reportedly shot at by local police officers and then arrested and later charged with, among other things, inciting local residents to oppose the project and trespassing.

Ikuko Matsumoto, a director of the Tokyo-based Friends of the Earth-Japan, said the biggest problem is that some 50,000 residents have never been informed of the possibility that a 10-km segment of a local river could dry up due to the dam.

Tokyo maintains that these problems are domestic issues for Kenyan authorities to solve.

Muddying the waters

The dam has also drawn criticism from lawmakers, who question its cost-effectiveness.

“Construction experts are pointing out that the dam project in Kenya could have been done at only 30 percent or 40 percent of this cost,” said Lower House member Mitsuru Sakurai, of the Democratic Party of Japan, the largest opposition party.

As of 1999, the whole project was estimated to cost Nairobi 20 billion yen — about 6 percent of the country’s annual budget. ODA loans from Japan would finance 88 percent of that cost.

“It is a wasteful extension of a loan,” Sakurai said, adding that even if Japan stops now, the Kenyan government will probably ask Japan to erase the debt.

“In any case, there will be a huge burden on Japanese taxpayers.”

Nobuto Hosaka of the Social Democratic Party points to the inscrutable nature of ODA projects.

Hosaka officially asked the government to account for the money spent in the first phase of the Kenya project.

He was only given a vague breakdown showing that of the 6.9 billion yen, 4.4 billion yen went to the Konoike-led venture and 1.9 billion yen was assigned to Tokyo-based consulting firm Nippon Koei Co.

Further details — costs for a tunnel or water-intake facilities, for example — cannot be provided, according to the Foreign Ministry, which says the business belongs to Nairobi, not Tokyo.

“We want to scrutinize each and every ODA project, but figures for that are not available,” said Hosaka. “In this case, details of how the money has been spent are not disclosed either from the Japanese or Kenyan governments.”

Hosaka claims that the Kenya dam plan is an example of a typical ODA project: “Done by Japanese firms, for Japanese firms, with Japanese taxpayers’ money. Just like an overseas version of public works projects.”