EACC recovers Sh18 million paid by Isiolo govt for oxygen plants

The anti-graft agency has recovered Sh18 million of exaggerated costs in skewed procurement of and installation of two oxygen plants by the Isiolo county government five years ago.

The contract to install the plants at Garbatulla Sub-County hospital and Isiolo Referral Hospital was awarded to Hitmax Limited despite not being the lowest bidder.

An investigation by the commission following a complaint lodged to it in September 2018 over the award of the contract established that the quoted price had been inflated.

The company had quoted Sh52, 280, 956 for plant at the referral hospital and Sh27, 279, 882 and was paid a total of Sh79, 853, 738 for both tenders.

Upper Eastern Ethics and Anti-Corruption Commission boss Charles Rasugu told the Nation that  EACC independent valuation showed that the two plants would have cost Sh61 million.

“The valuation established that the costs had been inflated prompting filing of a suit to recover the funds,” he said.

EACC also established that Sh39, 925, 869 from the paid amount was on April 5, 2018 transferred from the company’s bank account to a law firm of Hamilton Harrison & Mathews for purchase of a marsonneite that was built on LR No 3734/937 in Lavington, Nairobi.

The commission’s money trail led detectives to Sh13 million held in two accounts which the court allowed the agency to preserve.

Two years ago, the agency sought orders at Milimani High Court to recover the Sh79 million but was granted temporary injunction to preserve the Sh13 million earlier wired from Hitmax Limited’s bank account and the Lang’ata property.

The contractor would a month later in July 2020 make an application to the EACC to settle the matter out of court which was allowed and carried out through the Alternative Dispute Resolution.

Mr Rasugu said EACC allowed the out of court settlement on condition that the Sh18 million would be released and the oxygen plants be improved to the required standards, according to the contract terms.

“We have managed to recover the Sh18 million for the taxpayers and the process is finalized,” he said.

Under the consent deposited in court, the contractor was to carry out corrective works on the plants which Mr Rasugu said EACC engineers had established to have been satisfactory.

Having paid the amount to EACC, the Sh13 million that had been frozen and the held property in Lavington were released back to the defendant.