Ministry on spot over Othaya Hospital upgrading

The main block of the Othaya Level Four Hospital. [File, Standard]

The Ministry of Health inflated the cost of upgrading Othaya sub-county hospital by at least Sh142 million in a project that has since stalled.

MPs last Friday learnt the ministry has spent Sh579 million in a project initially budgeted to cost Sh436 million.

And Treasury has refused to pump in more funds into the project since healthcare is a devolved function.

And in another twist that has put the project in total limbo, Nyeri county government said it would only take up the facility once it was complete and operational.

National Assembly’s Public Accounts Committee (PAC), chaired by Opiyo Wandayi (Ugunja), asked Health Principal Secretary Peter Tum to explain the circumstances under which the cost of the project was varied by over 33 per cent.

The MPs said the manner in which the project was handled points to a possible collusion between officials at the ministry and some “external forces”.

Initial contract

“The ministry reported an expenditure of Sh3, 911,981 for the construction of Othaya sub-county district hospital which accumulated to Sh578, 542,747 for construction as at June 30, 2016 which when compared against the initial contract value of Sh436, 300,798 gives a rise to a variation of Sh142, 241,949 which is about 33 per cent that has not been supported,” reads Auditor General Edward Ouko’s report.

The MPs heard that despite the over payment, the project was incomplete and still requires another Sh272, 500,000.

Further details reveal the ministry issued a fresh contract to Lunao Enterprises to complete the work at a cost of Sh141, 959,487.

This means the project will now cost Sh720, 331,230 (65 per cent variation).

But in response, Tum said the variation was as a result of incomplete quantification of works at the design stage.

Actual work

“Evidence of this is the project financial appraisal report by the State Department for Public Works which shows that works captured in the Bill of Quantities amounted to Sh408 million while the actual work done before termination of contract was Sh578 million,” said Tum.

“The outstanding works were not included in the financial appraisal report as it covered work already done by the contractors and not the full scope of the works.

“With the termination of the contract, outstanding works were to be undertaken as a new contract and the State Department for Public Works gave an estimate of Sh272,500,000,” added Tum.