New demands as governors extend medical kits deal

Counties have extended the controversial Sh53 billion Managed Equipment Services (MES) programme by another three years but issued conditions the Health ministry must meet before they ink the deal.

According to the report released yesterday by the Council of Governors, they agreed to extend the contract on condition that, together with the Ministry of Health, they will review the budget to address ‘equity concerns’.

All counties have been paying Sh200 million regardless of which equipment they got and whether they are working or not.

The county chiefs are also demanding that contractors deliver on all their obligations under each contract.

Some governors had earlier indicated that they would not extend the contract, saying they had paid more money for the equipment. The governors had evaluated three options before agreeing to extend the deal.

On the first option, the county bosses considered withdrawing from the contract and disposal of equipment by the contractor.

Final disposition

In this case, the legal title to the equipment would have remained with the contractor.

The contractor would have removed all the equipment and determined their final disposition.

“Each county government was to prepare by budgeting, procurement and installation of similar equipment before the expiry of the contracts — this is to ensure non-interruption of services while also ensuring that patients’ data and information stored in the equipment is backed up before being erased or removed by the contractor,” says the report.

This option was considered risky and was dropped.

In the second option, as stipulated in the contract, the Health ministry was entitled to purchase the equipment at a nominal value of US$1 at the end of the contract and then transfer them to respective county governments.

If counties had withdrawn from the contract, they would have made appropriate arrangements for maintenance and insurance of the transferred equipment to support continuity of service delivery.

This option was a risk to the counties in two ways: the ministry may refuse to purchase and transfer the equipment to the devolved units and that the counties may not raise the funds required to implement the programme.

The governors settled on the third option, which is the extension of the contract.

The two levels of government will jointly agree on the negotiating team that will come up with terms of reference for the contract implementation committees.

The extension will cost Sh100 million per county per year, which translates to Sh14.1 billion in three years.

For the seven-year contract that ended on February 5, 2022, the counties had paid $470 million (Sh53 billion), paid quarterly.

General Electric of USA got a huge chunk of the money, $238 million, for supplying radiology equipment, with 98 hospitals equipped with digital X-ray, ultrasound and other imaging equipment.

MES contract

The second highly paid company was Esteem Industries, which got $130 million for equipping 96 hospitals with sterilising equipment, complete with surgical sets for all operations.

An additional 24 hospitals received surgical equipment following variation of the MES contract in 2017/18.

Shenzhen Mindray Bio-Medical Electronics Company received $54 million for supplying 96 hospitals with theatre equipment.

Nineteen additional hospitals were equipped with theatre equipment following variation of the contract in 2017/18.

Philips Medical Systems Nederland received $45 million for equipping 11 hospitals with Intensive Care Unit (ICU) facilities.

Bellco S.R. L received the least amount, $28 million, for renal and dialysis machines distributed in all the counties and two national referral hospitals.

An additional five dialysis centres were later supplied.