Queries over Sh22b stalled NHIF project

Auditor General Edward Ouko has questioned delays in implementing a Sh22 billion project by the National Hospital Insurance Fund (NHIF) that has stalled for 12 years.

This comes even as it emerged that a parliamentary committee which was probing the delay had recommended that the project commences immediately and be wound up within five years.

Ouko in his report for the year 2013/2014 states that NHIF had valued its property, plant and equipment to be at about Sh12 billion, which includes the 23-acre piece of land which was acquired in 2002 at Sh93 million.

The land was to host the proposed multi-billion shilling project for a specialised medical centre in Nairobi’s Karen area which failed to kick off even after China offered to finance the entire project.

The development has already cost tax payers over Sh400 million as fee to consultants, who were commissioned to carry out feasibility study.

“A further review indicates that as at June 30, 2014 is work in progress balance of Sh1,444,687,484 in respect to payment from drawings and designs for the project whose construction has not yet commenced, over 12 years, since the land was acquired,” Ouko’s report dated June 30, 2014 states.

Further losses

The Auditor General, however, says the management explained the delay in commencement of the project as due to lack of approval from the parent ministry.

“In the circumstances, it has not been possible to ascertain the status of the property, plant and equipment of Sh12, 110, 912,000 as at June 30, 2014 is fairly stated.”

Ouko’s report comes at a time when the National Assembly departmental Committee on Health recommended that the Karen Centre of Excellency, which was identified as Vision 2030 project should proceed expeditiously owing to its strategic intervention and rationale to avoid furthers losses due to delay or termination.

“The Ministry of Health to take over the implementation of the flagship project to completion and reimburse NHIF all monies contributed to the project to date,” the report by the Rachael Nyamai-led committee states.

The MPs also recommended that the Ministry of Health works closely with the Public-Private Partnership Secretariat and the Ministry of Finance in following through with the financing proposals for funding to guarantee full operationalisation of the project.

“The project to be completed in a maximum of five years so as to ensure that the indicative payback period of eight and half years is realised,” the fourth recommendation reads.

The NHIF centre is expected to serve the eastern and central Africa region and help ease congestion at the Kenyatta National and Moi Teaching and Referral hospitals; the leading referral facilities in the region.