Hallo, come for a tender... How Kemsa dished out Sh4bn deals 

Kemsa offices

The Kenya Medical Supplies Authority's offices in Industrial Area, Nairobi, as pictured on September 9, 2020.

Photo credit: File | Nation Media Group

What you need to know:

  • Kemsa managers told MPs that tender advertisements for the Covid-19 materials were not made public.
  • Health CS Mutahi Kagwe and PS Susan Mochache are expected before Parliamentary committee committee next week.

Corrupt tenderpreneurs were awarded Sh3.9 billion worth of Covid-19 supplies through phone calls in an elaborate scheme that saw taxpayers’ cash siphoned into a few individuals’ pockets as hospitals and medical workers grappled with a severe shortage of life-saving protective gear. 

Other well-connected influence peddlers just walked into the Kenya Medical Supplies Authority (Kemsa) headquarters in Nairobi’s Industrial area and signed supply contracts worth billions, a Parliamentary committee heard yesterday, revealing fresh details of how the “Covid millionaires” self-enrichment scam was executed.

Kemsa managers told MPs that tender advertisements for the Covid-19 materials were not made public, and that most firms were awarded contracts worth tens of millions of shillings after their directors got phone calls from “senior officials.”

The Kemsa acting chief executive Edward Njoroge, appearing before the National Assembly’s Public Investments Committee (PIC), also revealed that most companies that were awarded contracts were not pre-qualified and were not in the State-owned drug agency’s procurement database.

Under government procurement rules, companies must be pre-qualified before being awarded a tender. 

Amid the shocking revelations, Mr Njoroge told MPs that Kemsa is broke and does not have a single cent in the bank even as investigations into the multibillion-shilling Covid-19 heist continue.

The authority’s procurement manager, Edward Buluma, told the committee led by Mvita MP Abdulswamad Nassir that most of the companies that sold Covid-19 materials to the agency were not among the pre-qualified suppliers.

“Most of these companies were called to supply. There was no advertisement of the tenders,” Mr Buluma said.

He did not tell the committee who specifically was calling the companies.

Senior Ministry of Health officials were previously accused of having issued phone instructions to Kemsa managers to award tenders to their surrogate firms in what was christened as the “Covid millionaires” scandal that elicited widespread public uproar. 

Health Cabinet Secretary Mutahi Kagwe and Permanent Secretary Susan Mochache are expected before the committee on Tuesday next week to answer questions on the utilisation of the pandemic billions. President Uhuru Kenyatta ordered a probe into the Kemsa scandal within 21 days in August.

Face charges

The Director of Public Prosecutions received the Ethics and Anti-Corruption Commission findings into the scam in September, and appointed a panel to review the file, but has not yet announce whether any individuals will face charges over the matter.

Mr Buluma told MPs that some individuals just walked in at Kemsa headquarters to inquire whether the agency needed Covid-19 related materials and ended up walking out with tenders worth millions of shillings.

Nyeri Woman Representative, Rahab Mukami, asked how, for instance, Shop ‘N’ Buy Ltd, a company registered on February 14 2020, was contracted by Kemsa to deliver KN95 Facemasks and Personal Protective Equipment (PPEs) at a cost of Sh900 million.

“How were these tenders given, or were they just given to friends?” Ms Mukami asked.

The MPs also questioned how Kilig Ltd, formed on January 22 even before Africa reported its first case of Covid-19 infection, was awarded a tender to supply PPEs worth Sh9 million.

At least four firms, according to the Auditor General’s special audit report, were awarded contracts worth Sh1.3 billion to deliver items that were not covered by the state agency’s 2019/20 approved budget as of June 4, 2020.

Among the firms indicated by the auditor’s probe is Nanopay Limited, registered on August 22 2019, which supplied KN95 Facemasks to Kemsa at a cost of Sh350 million. The firm delivered its medical items and was paid on August 6, 2020. 

The report indicated that the firms had no financial track record or capacity to deliver, but were nonetheless hand-picked by the drugs agency to supply Covid-19 medical kits.