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How unqualified contractor earned Sh275 millions in container clinics scam

By Kamau Muthoni | Published Thu, June 7th 2018 at 11:06, Updated June 7th 2018 at 11:11 GMT +3
Two men walk past some of the 100 container clinics at NYS camp, Miritini in Mombasa County. [Gideon Maundu, Standard]

If the 100 mobile clinics that cost taxpayers Sh800 million had been sourced directly from the supplier, they would have cost Sh525 million, according to the anti-graft agency.

The additional Sh275 million that the Government paid was pocketed by a go-between firm, the Ethics and Anti-Corruption Commission said in its suit.

EACC has sued Lands Principal Secretary Nicholas Muraguri, former Health PS Khadija Kasachon, two firms and 19 individuals in a bid to recover the money. Kasachon is now the Labour PS.

Six-day trip

The containers were supposed to be fabricated locally but this ended up being done in China. This saw a Kenyan delegation embark on a six-day trip to the Asian nation.

Some Sh200 million meant for the free maternity fund was instead used to pay for the clinics, according to court papers.

The Health ministry awarded Estama Limited the Sh800 million deal in belief that it had the capability to convert the containers into 100 clinics.

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For a firm to quote for the tender, it had to prove it had experience and ability to carry out the above task.

None of the 10 firms who quoted, including Estama, gave evidence on what they had done in Kenya before, EACC said in its suit papers.

Two of the firms - Abex Limited and Zagawa Limited - were shortlisted in the final batch of those who had qualified although they never bid.

“None of the above listed firms had prior experience in prefabrication of containers into mobile clinics and there was no evidence as to how the said firms were identified and invited to quote for the tender,” court papers filed by EACC read in part.

According to EACC, Estama sub-contracted a Chinese Company - Guangzhou Moneybox Steel Structures Limited - to fabricate the containers.

EACC investigations claimed that Guangzhou was paid Sh525 million for the supply, meaning Estama pocketed Sh275 million for brokerage.

Out of the Sh800 million the ministry wired to Estama, Sh776 million was transferred to Business Capital Access Limited’s account held at Family Bank. 

Money transfer

Then followed a Sh420 million transfer to Business Capital’s account held at Kenya Commercial Bank.

It is then that Sh525 million was transferred to Moneybox’s account in China.

EACC said the ministry sent four officials - Ephantus Maina, Susan Otieno, Ibrahim Maalim and Izaq Okoth to China to inspect the clinics, a trip that took six days. It also emerged that there was no money allocated for the clinics.

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