NAIROBI: The fate of the Sh5.6 billion health cover now hangs in the balance as teachers push to retain their medical allowances that were supposed to be pooled to finance the healthcare programme.
Teachers Service Commission (TSC) and medical cover administrator AON, Tuesday failed to confront the issue even as the contract documents seen by The Standard reveal a web of legal landmines.
Details in the contract spell out instances upon which the one-year contract can be terminated, complete with accountability obligations.
The agreement shows that AON would incur expenses in the event it failed to provide adequate services, while TSC committed to meet all payments necessary to run the scheme.
"The commission shall be responsible for payment of the contract price, administration fees, capitation fees and self-funded claims as agreed," reads clause 8.1 of the agreement.
The deal defines 'contract price' as the total cost needed to run the medical cover, being Sh5.6 billion.
The comprehensive medical scheme is funded through conversion of the current teachers medical allowance into a medical fund.
But with the concerted push by the two teachers' unions to retain their medical allowances, pressure is mounting on TSC on how it shall meet its obligations.
WON CASE
Kenya Union of Post Primary Education Teachers (Kuppet) already won a court case that barred TSC from deducting teachers' medical allowances to finance the scheme.
The teachers' employer is yet to appeal the court's decision. And the Kenya National Union of Teachers (Knut) has also written to TSC not to effect medical allowances deduction on its members.
This means if TSC heeds to the calls by Knut, it may not meet the contractual obligation that mandated it to pay the 'contract fees.'
Clause 23 of the agreement reads: "The party causing delay in or failure to perform its obligations under this agreement shall immediately notify the other party in writing of such delay or failure and the reasons for such delay or failure and if such delay in or failure to perform continues for at least 60 days from the date of such delay or failure, either party will be entitled to terminate the agreement by notice of writing."
The contract document states TSC agreed under its obligations as thus: "...to pay the contract price to the administrator, which will be based on the teachers scheme population of 288,060 provided in the tender documents and benefits."
The commission also committed to observe payment timelines as per the agreement.
Stay informed. Subscribe to our newsletter
TSC Chairperson Lydia Nzomo Tuesday downplayed the matter, saying it was a bridge that shall be crossed at the right time.
"That is a matter for all commissioners to sit and deliberate on. They are out in the field and as soon as they come we shall see the way forward.
"We know the contract was signed between TSC and AON. We also know Kuppet got court orders barring us from deducting their medical allowances. And if Knut also gets such orders we shall see as a commission what to do next," she said.
AON Chief Operations Officer Sammy Muthui said the contract is alive and is being implemented fully.
"We do not have any notification from TSC telling us there is a problem. As far as we are concerned, we have never stopped implementing the scheme," he said.
Mr Muthui said the court decision neither faulted the procurement process nor touched on the contract.
Sources familiar with the contract reveal neither of the parties would attempt to terminate the contract for fear of paying damages.
The contract duration was scheduled to start on July 1, 2015 to June 30, 2016.
The Standard Group Plc is a
multi-media organization with investments in media platforms spanning newspaper
print operations, television, radio broadcasting, digital and online services. The
Standard Group is recognized as a leading multi-media house in Kenya with a key
influence in matters of national and international interest.
join