On July 15th 2003, the Government of Kenya (represented by the
Treasury and Ministry of Defence) entered into a contract with
Euromarine Industries by which Euromarine would deliver an oceanographic
survey vessel to the Kenya Navy for close to Ksh 4.6 billion.
The contract features as one of the 18 contentious security
related contracts colloquially described as Anglo Leasing type.
On the same day, two financing contracts were also entered
into with two Spanish firms. At some point, Euromarine sub-contracted
the ship's construction to another Spanish firm known as Astilleros
Gondan.
Payments on this contract were stopped in June 2005, following
the earlier intervention of John Githongo, former Permanent
Secretary for Governance and Ethics in the Office of the Kenya
President. Euromarine was then reported to have instituted legal
action against the Government of Kenya for the withheld payments
on the navy ship derogatorily called "Kenya's Spanish Armada"
by a former British High Commissioner to Kenya, Edward Clay.
The withheld payments have generated political pressure on the
Treasury including, according to John Githongo's Report to President
Kibaki of November 2005, direct requests to him by the former
Ministers for Justice and Internal Security (Kiraitu Murungi
and Chris Murungaru).
The ship deal remains cloaked in mystery and has been the subject
of an extraordinary press statement by Chris Murungaru in which
he names the President as the substantive Minister for Defence
and categorically states that no such procurement could have
been undertaken without President Kibaki's authorization, which
was given according to Dr. Murungaru in June 2003.
Click here to download the Report