Kenyans lost Sh12 billion to ‘criminal’ medical kit project

President Uhuru Kenyatta (2nd right) and DP William Ruto are shown how an ICU machine works  by former Director of Medical Services Nicholas Muraguri during the signing of contracts for the Managed Equipment Service (MES) on February 6, 2015.

Photo credit: File | Nation Media Group

What you need to know:

  • And according to the Council of Governors, some of the equipment are not working.
  • Philips and General Electric East Africa successfully bid for the supply of ICU and radiology equipment.
  • Every county is paying Sh131 million annually, with two more years to the end of the contract.

Some Sh12 billion could have been lost in the purchase of medical equipment for counties – a project branded by a Senate investigation committee a “criminal enterprise designed to enrich individuals”.  

Senators did not quantify the amount lost in contracts awarded in February 2015 initially for Sh43.6 billion, but said independent inquiries show the value of the specialised equipment was inflated by three to eight times.

A report by a team that investigated the Managed Equipment Service (MES) said independent analyses by counties revealed the value of the gadgets was grossly exaggerated.

Every county is paying Sh131 million annually, with two more years to the end of the contract. Some counties are paying for kits that are still with manufacturers in the Netherlands.

The Nation established that the government went for inflated contracts that saw every county on average given equipment costing Sh800 million when there were much cheaper options.

Kitui survey

The committee cites a survey by Kitui County on equipment supplied.

The equipment was valued at Sh331,542,230. However, the Health ministry said the kits supplied to Kitui cost Sh811,309,770.

The Senate team found on “Medical Price”– an online search engine – that the average cost of the C-Arm X-ray imaging machine supplied by General Electric was $88,656 (Sh8.9 million).

However, the ministry gave the figure of Sh40 million.

The average market price for the ultrasound machine supplied by the same firm is Sh2.9 million but officials at the ministry indicated Sh23.5 million.

“According to the Council of Governors, the cost of the equipment received under the project was highly exaggerated. Had counties been allowed to procure the equipment, they would have got them at a fraction of the cost,” the report says.

It cites the example of Uasin Gishu County whose survey revealed that the total value of equipment received was Sh84.9 million.

Ziwa Referral Hospital got kits valued at Sh54.1 million while Burnt Forest Hospital’s were valued at Sh30.7 million.

The amounts contradict the ministry’s submission to the committee. The ministry said every county got equipment valued at Sh805 million to Sh1.1 billion.

The Senate committee demanded to know why the Ministry of Health applied a blanket Sh95 million annual payment to every county when the equipment supplied was not standard in value.

Disowned by Muraguri

The figure rose to Sh200 million the following year and reduced to Sh131 million last year.

There was more shock on the price of basic items. A stitching removal set, which comprises a suture tray, a pair of scissors and tongs, was supplied to counties at Sh398,849.

The amount was more than 80 times the average cost of similar equipment in the market.

Simple instrument trolleys were supplied at Sh269,922 – 18 times their cost.

Spotlights were supplied at Sh1,419,514 each – at least 1,774 times the average price. Washing basins were priced at Sh1,302,935 – at least 1,667 times the market price.

Embarrassing inventory

So embarrassing was the price inventory attributed to the ministry that it prompted a falling-out among its top brass.

Pressed by the committee to explain the cost of the equipment as submitted by her ministry, the then Health Cs Sicily Kariuki said it was reasonable, the report says.

However, Ms Kariuki’s predecessor James Macharia and Dr Nicholas Muraguri disowned the figures when they appeared at the committee.

Mr Macharia was Health CS when the contracts were awarded while Dr Muraguri – now Lands Principal Secretary – was the Director of Medical Services. He was Health PS between 2015 and 2017.

Dr Muraguri signed the contract for radiology equipment with General East Africa Ltd on March 31, 2016.

Mr Macharia and Dr Muraguri tabled a list from Philips, which indicated the price of a stethoscope at Sh4,500 and not Sh1.2 million in the ministry’s schedule.

Dr Muraguri also disowned the cost of ICU equipment submitted to the committee by the ministry.

The conflicting figures prompted senators to recommend that the Office of the Auditor General looks into the project.

Trail of payments

The audit will in within six months establish the trail of payments from the Ministry to contractors and the amounts involved.

Meru County has been paying for five years yet the equipment is still in Europe.

“We went to the Netherlands and found equipment belonging to Meru despite the county settling the entire amount. The contractor is not receiving the payment,” Kitui Senator Enoch Wambua told the Nation Wednesday.

And according to the Council of Governors, some of the equipment are not working.

Two theatre machines at Iten Hospital, digital X-ray machine at Marsabit Referral Hospital and anaesthetic and infant radiation machines in Emuhaya have never worked.

“Since some equipment are still in disuse, the Ministry of Health should negotiate for the extension of the service at no additional cost,” says the report tabled in the House on Tuesday.

The equipment under the MES project was in seven categories: (1) theatre; (2) theatre and central sterile services department; (3) and (4) laboratory; (5) renal; (6) ICU and (7) radiology.

Philips and General Electric East Africa successfully bid for the supply of ICU and radiology equipment.

Sh27.8 billion contract

The combined contract value of the ICU and radiology equipment was Sh27.8 billion, equivalent to at least 60 per cent of the total contract value of the project.

Other firms awarded the tenders were Shenzhen Mindray Biomedical Electronics Co (China).

Esteem Industries Inc. (India) and subcontractor Debra Ltd (Kenya) secured Lot 2.

Bellco SRL (Italy) and subcontractor Angelica Medical Supplies Ltd was given Lot 5.

The tender for Lot 3 was awarded to Systemex Eorope GMBH, but the company declined the offer. Lot 4 bids were declared non-responsive.

The project targeted to equip 94 county and sub-county hospitals, commonly known as level 4 and level 5 respectively.

No requisite personnel

Governors said lack of requisite personnel had made it impossible to operate some machines.

The committee heard how Homa Bay county government spent Sh5 million to train a radiologist for five years. When the officer graduated, he declined to return to Homa Bay.

Theatre equipment at nine hospitals are idle owing to lack of requisite personnel or electricity, the report says.

In Tana River County, the theatre equipment installed at Garsen Health Centre is not yet operational because of the ongoing construction works and lack of three-phase electricity.

The Council of Governors added that except for starter gadgets, devolved governments were compelled to buy reagents and consumables for renal, radiology and theatre equipment.

Yet the MES project gadgets were locked to specific reagents and consumables, which were expensive and not readily available in the market.

Interestingly, the money needed to buy the reagents and consumables was not factored into the conditional grants.

Already procured

Some counties were made to receive equipment they had already installed.

Turkana County, for example, was supplied with an additional CT scan machine to one that the Governor Josphat Nanok administration had already procured.

Members of the Senate committee defended the decision not to name those responsible for the expensive mess.

“It is a very complex project. It is not easy to tell who bears what responsibility without a forensic audit,” Mr Wambua went on.

“Otherwise, we would have had to name everybody at the risk of assassinating innocent people’s character. That is why we recommended an audit that will clearly show who did what.”

Nominated Senator Millicent Omanga, a member of the committee, said it is upon the country’s investigative agencies to look into the project and pin down its architects.

“Many people were involved in the MES project. We did not mention a specific person. May be, that was a weakness on the side of the committee but we did our work objectively. It is now up to the Ethics and Anti-Corruption Commission and other agencies to do their work,” Ms Omanga said.