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Fate of Sh38 billion medical leasing equipment in limbo

By Jacob Ng’etich | May 25th 2019
By Jacob Ng’etich | May 25th 2019


President Uhuru Kenyatta and Deputy President William Ruto inspect medical equipment procured through the Managed Equipment Services (MES) Project at State House, Nairobi. Also present is CS for Health Mr. James Macharia, Director of Medical Services Dr. Nicholas Muraguri and Mr. Cheng Minghe of Mindray Megascope Health Care. [PSCU]

The fate of the controversial Sh38 billion medical equipment leasing project now lies with an eight-member committee of Senate and National Assembly that will seek to unblock the impasse over the passage of Division of Revenue Bill, 2019.

Senators have struck out from the Budget Sh6.2 billion allocated to the Managed Equipment Services (MES) programme putting in limbo the seven-year deal with the counties.

Senate in the County Allocation of Revenue Bill, 2019 knocked off the cost claiming the deal was shrouded in mystery and need to be debated before it was paid for.

Immediately after striking off the pay for MES programme, the senators got into a vicious fight over who will control the probe into the deal.

The speakers of the Senate and National Assembly have appointed National Assembly’s Majority Leader Aden Duale, his Minority counterpart John Mbadi, MPs Kimani Ichungwa (Kikuyu) and Cecily Mbarire (Nominated); and senators Mohamed Mahamud (Mandera), Mutula Kilonzo Jnr (Makueni), Susan Kihika (Nakuru) and Ledama ole Kina (Narok) as part of the mediation committee.

Resolve impasse

Though expected to resolve the impasse over last week’s rejection by National Assembly of senators’ amendments to Bill that increased allocations to the 47 counties to Sh335 billion from the Sh310 billion the MPs had proposed.

The team will also decide if the MES cash will be readmitted into the budget according to Senate Health Committee chair and Trans Nzoia Senator Michael Mbito.

“Senate has a strong feeling that the MES programmme was undertaken in a situation shrouded in mystery, they want to re-look at the matter, but it is now with the mediation committee to decide,” said Mbito.

In 2015, the Ministry of Health entered into a deal with five global companies for supply of medical equipment to two hospitals in each of the 47 counties at Sh38 billion.

The deal that attracted the wrath of governors, would see the the ministry deduct Sh90 million annually from each of 47 counties for leasing of the equipment.

Chair of Governors Council and Kakamega Governor Wycliffe Oparanya insists the county bosses support the position taken by the senators, which will solve the thorny issue that has lasted for four years.

“The MES programme smacks of high corruption, we have never seen the agreements between the suppliers and us, all we do is just pay; we do not know how much the supplier receives from what we pay,” said Oparanya. 

He added, “In the last four years we have asked for the agreement deals but none has been presented. We feel like there is theft that we are not keen to abet.”

To the chair of Governors’ Council, the national government should pay for the equipment as grants to the counties, and the county bosses will then redirect the millions to other projects in the counties.

“Some counties have now even started using the equipment and they have been paying for them, this is a rip off,” said Oparanya.

The MES deal has been caught in a web of mystery and opaqueness and whereas the ministry has so far accessed Sh27 billion that has been deducted from the counties primarily to go to the firms that supplied the equipment, it is not clear how much the firms have been paid.

Unilaterally procured

The Ministry of Health has been at odds to explain why they unilaterally procured the eight sets of diagnostic equipment on behalf of counties and only cajoled counties under the medical equipment lease plan.

Under the lease scheme, Ministry of Health would equip at least two hospitals in every county and the equipment would be leased for seven years.

The contractor under the scheme, meant to address treatment of cancer and renal diseases, the contractors the ministry claim had undertaken to train personnel and maintain the equipment for the seven years.

Kisumu Governor Anyang' Nyong’o called for the Senate to form a select committee to look into each of the five contracts to establish if there was value for money in acquisition of the medical equipment.

Just like Oparanya, Nyong’o wondered why there was variation from the initial Sh4.3 billion per year to Sh6.2 billion and another leap into Sh9.4 billion.

Given the increase the projection is that the counties could pay upto Sh63 billion from the fixed Sh38 billion deal.

The mediation committee will have 21 days to report back to the houses. Ministry officials did not respond to communications on options they will explore should the vote be reinstated into the budget.  

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