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SH28 BILLION BALANCE

Payment for leased medical equipment blocked

Petitioner says the cost is exaggerated and that the project does not align with people's actual needs

Afya House/Ministry of Health. Photo/Monicah Mwangi
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In Summary

• The Health ministry awarded leasing agreements for provision of specialised medical equipment to counties worth Sh38 billion. 

• Applicant says recurrent costs are being paid for against contract agreement. 

The High Court has barred the state from further payment of the controversial medical equipment pending further orders in two weeks.

Justice James Makau stopped the Ministry of Health from paying the balance of money to the five companies for supply and maintenance of medical equipment under the Medical Equipment Scheme for the next 14 days.

The companies are Shenzhen Mindray Bio-Medical Electronics Company Limited, Esteem Industries (India), Bellco Srl (Italy), Phillips Medical Services and General Electric (USA).

 

A Kenyan had early this month moved to court challenging the Sh38 billion tender for the supply of medical equipment and wants payment of the remaining Sh28 billion stopped.

The ministry awarded lease agreements for the provision of specialised medical equipment to counties worth Sh38 billion. 

Daniel Muoki argues that foreign companies exaggerated the cost of equipment.

He is also seeking an order for an audit on the project by an independent international company, adding that the tender lacks transparency. 

Muoki argues that the cost against prevailing market rate exposes the taxpayer to a huge burden.

In February 2015, the Ministry initiated a seven-year programme known as Managed Equipment Services under which it engaged different international companies for the supply, installation, maintenance, replacement and disposal of various equipment.

The programme has been implemented in 98 hospitals across the 47 counties with the focus on theatre, central sterile services department and renal ICU and radiology equipment.

Muoki says the total tender sum for the programme is Sh43.2 billion paid in quarterly instalments of Sh1.52 billion. A total of Sh18.16 billion has been paid.

For example, he says, the contract indicates that recurrent cost such as the supply of consumables and reagents as well as equipment maintenance was to be covered at no additional cost yet the ministry continues to pay without any accountability.

"Despite several accountability and transparency issues raised by counties, they were compelled to pay Sh95 million per year for the project," he says.

The extra Sh95 million has adversely affected the budgets of counties and has since been revised upwards to Sh200 million, the court was told.

Muoki accuses the ministry of failing to conduct a needs assessment prior to launching the project, with the result that the installed equipment does not correspond with the actual needs of a county.

"Various equipment installed under the MES project remain unused in at least half of the counties across the nation, yet the affected counties are still being compelled to pay for them," he says.

He alleges that counties did not receive full disclosure on the contracts entered into on their behalf with equipment manufacturers.

Makau directed Muoki to file and serve the respondents with the petition either personally or through an advertisement within the next 10 days.

The inter parte case will be heard on June 3.

(Edited by R.Wamochie)