Nairobi county has yet again been dragged to court over a Sh1.7 billion medical cover for county staff.
Health insurance company AAR is also on the spot as it fights to stay in the lucrative deal since winning the tender for two consecutive years during former Governor Evans Kidero's administration in the financial year 2015/16 and 2016/17.
The respondents in the more than 16,000 paged petition filed in High court on Friday are Governor Mike Sonko, former county secretary Simon Morintant and former finance CEC Veska Kagongo. Others include director general Public Procurement Oversight Authority, Controller of budget, AAR insurance and Bliss Health care.
The tender was to end in June 30th 2017 but the new regime under Sonko did an extension for three months to allow room for procurement process. During this period, AAR was paid Sh326 million.
According to the County Assembly minority chief whip Peter Imwatok, who is also the petitioner, the total amount that the county paid in the extended period was more than the money the county paid the insurance company for two years.
The executive wrote to the Public Procurement Oversight Authority (PPOA) and controller of budget on the extension to allow procurement, which takes 2 months, read the petition filed in High court on Friday.
The Nairobi County failed to advertise during the said period and after the lapse of three months they again did an extension of three months between October 31 to December 31 last year and paid another Sh326million.
“During the second extension, the executive failed to give the assembly a utilization report to show that the insurance received the same amount they did in the first extension. Mark you the county paid less than sh 600million for every year," Imwatok said.
On November 19 last year, the county re- advertised the tender which at evaluation stage, AAR quoted Sh1.3billion. However, the tender was awarded to Britam who quoted Sh866 million and the reserved price was Sh850million in regard to the budget approved by assembly on vote on account.
Imwatok accused the executive for having bulldozed the assembly to pass the supplementary budget knowing that they had already spent Sh652 million on the insurance. Only Sh197 million was remaining and the law does not allow to budget above the available money.
The minority chief whip said that when the executive realized AAR did not win they cancelled the tender citing that the advertisement did not factor in 1000 newly recruited inspectorates and that the bidders bid above the reserve price.
The former acting county secretary Simon Morintant, who is also a respondent, wrote to PPOA on the cancellation.
Imwatok said in the first tender, the county was to insure 12,600 employees but during the re-advertising they quoted 14,000 workers hence insuring 1,000 ghost workers.
“The county government is insuring ghost workers comprised of 1000 inspectorate and firemen who have not been employed to date. AAR in the first tender of 12,600 employees they quoted Sh1.3billion but when the numbers went up they quoted a lower amount of Sh1.06billion instead of quoting more since the number had gone up winning the tender,” Imwatok said.
He said before the bidders went to petition to the PPOA, the county paid Sh1.06billion to AAR after 11 days resulting to coffers losing Sh1.72billion.
After the county realized that AAR had lost the bid, they introduced an addendum in the second advertisement which required the winner to provide names of the hospital for service providers.
Since the Nairobi staff did not want Bliss GVS it was not among the list of the hospitals however before the completing of the tender process another addendum was advertised that they will single handedly provide health services.
Imwatok was also included the controller of budget in the list of respondent wanting him to be put to task why he approved the budget that had an overrun of sh 877 million aware that the first budget had been spent on illegal extension.
“Nairobi county government lost in six months more than Sh1.72billion to one company that is providing services in a container while the Bliss GVS in services offered at two containers placed in GPO huduma centre and the other at Railways posta,” Imwatok said.
He added that the procurement was illegal as it was done before the county had passed the budget.
Last week the nominee for finance Newton Munene was dragged to the saga when he found himself on the spot after it emerged he was related to the head of AAR group.
Munene admitted before the finance committee that he is related to AAR group chief executive officer Caroline Munene, but said that he was not aware the firm is doing business with City Hall.
“We are five in our family with three girls and Caroline Munene is my sister but I am not aware that AAR is doing business with the county,” Munene said.
Imwatok said the county assembly will not be used to rubber stamp such a nominee, whom the “governor knows is the brother to the same person fleecing the county.”
“Meaning we are now connecting a complete circuit of cartels as much as we pretend that we are fighting cartels. We are knitting a big cartel,” he said.
However, Munene who is a Bachelor of Commerce graduate from University of Nairobi assured the committee that the relationship will not interfere with his work.