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Kemsa in Sh1 billion tussle with insurer over fire compensation, two years later

By Ally Jamah | March 16th 2015

Kenya: The Kenya Medical Supplies Agency (Kemsa) is still struggling to recover Sh1 billion compensation from a local insurance company, two years after a fire destroyed its drugs depot.

Kemsa Chief Executive Officer John Munyu told the National Assembly's Committee on Health that they are locked in a court battle with Jubilee Insurance regarding payment of the compensation after the company declined to pay.

"The insurance company has given its reasons for refusing to compensate us for the fire accident but we insist  we are entitled to the payment. The court will make a decision on that. The next hearing is coming up in April," Dr Munyu told MPs who were visiting the Embakasi depot for a briefing about Kemsa's operations.


Chairperson of the Health Committee Rachael Nyamai said MPs will step in to assist the agency recover the money in order to strengthen its operations of supplying essential drugs to Kenyans.

"This issue has dragged for so long and we hope it will be resolved quickly. We are ready to do everything in our power to ensure it's resolved amicably," she said.

Munyu said Kemsa had ceased all business dealings worth millions of shillings with the insurance company following the disagreements that have arisen over the compensation.

The fire, which occurred on January 19, 2013 and which investigators later blamed on an electric fault, destroyed Kemsa's depot in Nairobi's Embakasi, which contained medical drugs and equipment.

The Kemsa boss also told the committee they are still trying to recover Sh1.5 billion debt from the Ministry of Health that has been outstanding for the last two years for medical drugs supplied to health facilities across the country under a World bank-funded project

He called on the Ministry to fast-track the release of the funds to enable Kemsa enhance its stock of drugs.

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