The Star has discovered how top officials at the Ministry of Health misappropriated public funds through the Sh63 billion Managed Equipment Scheme (MES) in 2014.
Documents in our possession reveal how the officials dismissed the initial MES concept paper, changed the financing model, used legal opportunism to interpret procurement laws and violated other laws before making governors accept the programme.
The documents, some tabled by Health CS Sicily Kariuki in the Senate ad hoc committee currently probing the Sh63 billion programme, also show how the officials varied contracts and the cost of the equipment.
The ministry abandoned the MES concept paper developed in 2008 that had identified public private partnership as the preferred form of financing the programme and adopted the public procurement model.
The change gave them leeway to use the provisions of the Public Procurement and Asset Disposal Act, 2015 to suit their plan.
They, for instance, applied a section of the Act that allowed direct tendering, thereby handpicking two firms to offer financial and legal consultancy services respectively for a contract sum of Sh68.6 million.
The firms did an analysis that informed the ministry’s decision to lease the equipment instead of directly purchasing them.
“The audit could not justify the urgency cited as a basis of using direct procurement since procurement of legal services would have been foreseen at project initiation level and planned adequately to allow for the competitive bidding process,” reads a special audit conducted on the ministry by the Auditor General in 2015-16 financial year.
Ministry officials then moved to each of the 47 counties and conducted needs assessment while keeping the governors and their health officers out of the picture.
The project entails leasing of assorted medical equipment — renal, laboratory, ICU, radiology and theatre — to at least two hospitals in each of the 47 counties for a seven-year period.
DEDUCTIONS INCREASED TO SH200M
In the deal signed at State House in 2015 between the Ministry of Health and six international manufacturers, a fixed sum of Sh95.7 million was supposed to be deducted annually.
However, the deal was varied along the way and deductions increased to over Sh200 million per county.
Justifying the increase, the CS told the committee the programme had been expanded to an additional 21 hospitals at the value of Sh3.7 billion for five years, translating to an annual payment of Sh740 million.
The CS said the expansion was necessitated by the need for specialised equipment in the identified hospitals to ensure access, as the ministry implemented President Uhuru Kenyatta’s legacy programme, the Universal Health Coverage (UHC).
The equipment was supplied by M/S Shenchem Mindary Biochemical Electronic Company (supplied theatre equipment worth Sh4.5 billion), M/s Esteem Industries Inc (supplied theatre, central sterile stores department equipment worth Sh8.8 billion), M/s Sysmex Europe GMBH (supplied laboratory equipment worth Sh2.9 billion) and M/s Bellco Ltd (supplied renal machines worth Sh2.3 billion).
The MES scheme was awarded in five slots for theatre equipment, theatre CSSD equipment, laboratory category one and two, renal equipment, radiology equipment and ICU equipment.
Last week, Council of Governors chairman Wycliffe Oparanya told the Senate committe how the county chiefs were sidelined in the conceptualization of the programme and narrated how they were made to sign the Memorandum of Understanding.
In some counties, the equipment was supplied before their governors signed the MoU to okay the programme. “The signing of the MoUs was done under duress. The pressure was too much from all quarters. I had to do it,” he said.
Due to lack of consultation, Oparanya told the committee, some of the equipment is lying idle in some facilities for lack of electricity, technical personnel, medical personnel and rooms to install them.
While the equipment remains unused, each of the 47 counties continues to pay a fixed and uniform amount of Sh200 million per year.
“Surely, why are counties paying for what they are not even using? What is the hurry for paying this equipment? Why are we paying?” nominated Senator Mary Seneta asked CS Kariuki when she appeared before the committee on Tuesday.
CS DISMISSES OPARANYA CLAIM
The CS dismissed Oparanya’s assertion that governors were not consulted prior to the supply of the equipment.
She said MES was implemented after a thorough feasibility study in 2013. The programme was also backed by a resolution of the Senate in 2014 that the ministry establishes and equips level 4 and 5 hospitals in each county.
“The CS Health held a meeting with the CEC of Health and county directors of Health at Multimedia University, Nairobi, where a resolution to fully support the proposal to equip public health facilities with modern equipment was arrived at and a communique signed,” she said.
Kariuki submitted that the technical personnel was trained after the equipment was supplied.
However, according to documents tabled by the CS, equipment supplied to at least 30 hospitals is not being used.
In Tana River county, theatre equipment supplied to Garsen hospital cannot be used because of lack of electricity, anesthetists and theatre nurses.
In Eldas and Kigumo hospitals in Wajir and Muranga counties respectively, theatre equipment has been installed but is not functional for lack of medical personnel.
Two theatre machines at the Iten County Referral Hospital, digital X-ray machines at Marsabit Referral Hospital and anaesthetic machine and infant radiation machine in Emuhaya subcounty hospital have remained unused for the past five years.
In Bungoma and Homa Bay counties, there are no radiologists in the X-ray department to operate the equipment, while CT Scans and renal units in Wajir have not been operational for the past three months.
Despite being delivered a year ago, a CT scan at the Coast General Hospital is yet to be installed.
Theatre equipment is also not operational in Mwala (Machakos), Suguta Marmar (Samburu), Endebes (Trans Nzoia), Baragoi (Samburu) and Kacheliba (West Pokot) hospitals.
In Meru, renal and ICU machines lie idle for lack of space to install them. In Kapenguria District Hospital in West Pokot, the renal equipment remains are not functional for lack of electricity.
The documents show among the items leased to 98 level 5 hospitals and four referral hospitals, as part of the theatre and ICU equipment, are consumable and disposable kits that ordinarily should have been procured by the counties or the Ministry of Health instead of leasing.
These include spotlights, drip stands, microwave ovens, dressing and general purpose trolleys, instrument trolleys, washing basins, baby cots and electric kettles.
Others are syringe pumps, infusion stands, operating theatre lamps, theatre tables, resuscitators, linen trolleys, patient stretchers and resuscitation trolleys.
In Nyeri Provincial General Hospital, for instance, 12 syringe pumps were leased for Sh17 million for seven years.
Two operating theatre lamps were supplied to the same facility for Sh9 million. Theatre spotlight cost the taxpayer Sh4.3 million in the MES scheme.
Kenyans also paid Sh1.4 million for patient trolley under the programme.
