Why Sh300b Grand Falls Dam project venture has been cancelled

The body meant to act as Kenya’s final referee in public–private investment disputes has quietly ground to a halt.

Documents seen by The Sunday Standard reveal that the Public–Private Partnership (PPP) Petitions Committee is not properly constituted, leaving only two of the seven members required under the law.

The result: more than 30 petitions worth tens of billions of shillings are gathering dust, and the National Treasury now effectively sits as judge and jury over projects it already controls.

A senior source within the PPP Unit admitted the committee “hasn’t convened for months” because there is no quorum. “You can’t legally hear cases when there are two members instead of seven,” the source said. “It means every project dispute now ends up back at Treasury.”

The most affected is the Grand Falls Dam project, a Sh300 billion venture whose cancellation by the Treasury in August has already sparked controversy. GBM, the British firm behind the project, had filed a petition before the PPP Committee to challenge the cancellation. The hearing was scheduled for this week, but it will not take place.

“We have received communication that the committee will not sit because it is not properly constituted,” confirmed GBM’s lawyer Wycliffe Nyamu in an interview adding, “Our petition cannot proceed.”

The committee’s inactivity has wider implications. Under the Public–Private Partnership Act, it is the only body empowered to resolve disputes between private investors and government contracting authorities. Without it, aggrieved investors have two remaining routes: seeking judicial review in Kenyan courts—often slow and politically charged—or international arbitration in London, a process that risks portraying Kenya as unstable for investors.

An internal correspondence seen by The Standard hints that the paralysis may not be accidental. The note describes the situation as “either by plan or design to ensure decisions are made elsewhere.” It goes on to warn that the absence of the committee “ensures that sensitive contract decisions stay within Treasury control.”

Analysts say that centralising decision-making in this way raises concerns over transparency. “If the petitions committee can’t function, then effectively, Treasury becomes the final decision-maker,” says a governance expert familiar with PPP operations. “That defeats the whole idea of independent oversight.”

A review of the committee’s recent activity shows it has not sat since early this year. Insiders attribute the delay to “unresolved appointments” and “pending gazettement” of new members. However, several of those interviewed believe the vacuum could be strategic—creating space for decisions to be managed internally rather than through formal hearings.

The Grand Falls Dam project, previously endorsed as a national priority, was terminated by Treasury on August 19, 2025. The project developer, GBM, claims the decision was arbitrary and politically influenced. Internal letters between the National Irrigation Authority (NIA) and Treasury show conflicting positions—one approving GBM’s proposal as compliant with all legal requirements, and another rejecting it under the same law.

With the PPP Committee out of action, GBM’s only recourse may now be arbitration. “Our client is reviewing options, including arbitration in London,” Nyamu said. “But it’s regrettable that a local mechanism meant to protect investors and taxpayers alike cannot operate.”

If GBM proceeds to arbitration, the case will likely test Kenya’s credibility before international financiers. Similar disputes have in the past led to heavy penalties against governments when tribunals found procedural flaws in project terminations.

Repeated attempts by The Sunday Standard to obtain official comment from the PPP Directorate and the National Treasury went unanswered. An official in the directorate, who spoke on condition of anonymity, said the quorum issue “has been known for months” but “no urgency” has been shown to fill the vacant positions.

Governance advocates warn that the situation could paralyse billions worth of private investment pipelines and erode investor confidence in Kenya’s PPP framework.