•AAR contract to lapse on June 30 as this financial year ends.
• Auditor General’s report for the financial year ending June 30, 2018, said City Hall made a total payment of Sh1.73 billion to AAR Insurance Kenya Limited although the contract sum was Sh1.07 billion.
Nairobi MCAs will investigate the AAR insurance for City Hall as some ward representatives allege the deal has become a cash cow for some county officials at the expense of staff.
The county government has been put on the spot for paying more than Sh652 million in excess of the medical scheme’s contract term of Sh1.07 billion.
The assembly will establish an ad hoc committee to investigate the AAR Insurance Kenya medical cover contract with City Hall.
“Everyone knows AAR has become a milking cow yet it is not giving quality service to the staff yet we are paying them close to Sh1.7 billion every year,” Assembly Majority leader Abdi Hassan Guyo said on Friday.
The probe decision comes as the county executive plans to shift medical cover for 12,000 City Hall staff to the National Hospital Insurance Fund.
Guyo said the Jubilee MCAs will bring a motion to form an ad hoc committee to probe the contract.
He said the committee will establish if any individuals have benefited from the Sh1.7 billion paid to AAR every year.
The deal was first signed with Governor Evans Kidero's administration in 2015 and it has been renewed at the end of every financial year. It will lapse on June 30 this year.
“We want to investigate how AAR was given the tender, what service are they providing for the staff and whether we have value for money they are paid,” Guyo said.
The Matopeni's MCA said once the committee investigates, the assembly will decide the way forward.
“The procuring entity is the executive. But as the assembly, our work is to investigate what AAR is doing and give recommendations to the executive,” he added
Nairobi City County Assembly Standing Order 205 states the assembly may establish an ad hoc to inquire into an issue under exceptional circumstances.
A notice of motion to establish the committee must be presented with a written recommendation of the Liaison Committee and certified by the assembly speaker.
The controversial Sh1.7 billion AAR Kenya medical insurance scheme for City Hall staff has made headlines for several years.
In September 2019, journalists were asked to leave the Assembly Public Accounts Committee while the probe was underway.
The watchdog committee was questioning more than seven members of the executive regarding their role in the scheme. MCAs didn't want journalists to hear.
According to the Auditor General’s report for the financial year ending June 30, 2018, City Hall made a total payment of Sh1.73 billion to AAR Insurance Kenya Limited though the contract sum was Sh1.07 billion.
“Although the total payment made so far to AAR Insurance Kenya Limited is Sh1, 725, 488,939, no explanation has been given for paying Sh652, 786,602 in excess of the contract sum of Sh1,072,702,337,” the report reads.
(Edited by V. Graham)