Leasing fees for county medical equipment inflated, leaders say

Busia Governor Sospeter Ojaamong’. He has vowed to defend himself, saying the tender award was above-board. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • Concerns are emerging that there is no value for money in the government deal with the multinational firms, General Electric and Philips, that are expected to supply the equipment and earn leasing fees of more than Sh5 billion annually, over a period of seven years.
  • Busia Governor Sospeter Ojaamong’ cautioned his colleagues not to blindly enter into a memorandum of understanding with the ministry of Health, but interrogate the motive behind the deal.
  • Dr Boni Khalwale (Kakamega, UDF) claimed the government stands to lose more than Sh21 billion if it leases medical equipment instead of buying in cash and meeting maintenance costs separately.

The cost effectiveness of the public-private partnership deal for the leasing of medical equipment for county governments has been cast in doubt.

Concerns are emerging that there is no value for money in the government deal with the multinational firms, General Electric and Philips, that are expected to supply the equipment and earn leasing fees of more than Sh5 billion annually, over a period of seven years.

Though the Sh38 billion project is meant to improve access to quality health care at the counties, the government has been accused of exaggerating costs.

Some governors and senators now want the matter investigated saying it is a scandal in waiting.

Busia Governor Sospeter Ojaamong’ cautioned his colleagues not to blindly enter into a memorandum of understanding with the ministry of Health, but interrogate the motive behind the deal.

“The Senate should investigate if we are getting value for money. We are being forced to take equipment on conditions that we can’t understand. An item that costs Sh4 million is going for Sh400 million,” he said last week during the public hearing session on the Division of Revenue Bill at the County Hall, Nairobi.

Dr Boni Khalwale (Kakamega, UDF) claimed the government stands to lose more than Sh21 billion if it leases medical equipment instead of buying in cash and meeting maintenance costs separately.

“As the Opposition, we can’t proceed to allow such an amount to be looted in this new thing called leasing. We want Treasury to tell us who is pocketing the money,” Dr Khalwale told the Senate Finance committee chaired by Billow Kerrow (Mandela, URP).

He said given that health care is a devolved function, the counties can utilise the extra funds in other projects if they are allowed to do outright purchase of the equipment.

The Council of Governors was represented by governors Mr Ahmed Abudulahi (Wajir), Mr James Ong’wae (Kisii), and Mr Sospeter Ojaamong’ (Busia) and Mr Kenneth Lusaka (Bungoma).

Finance Principal Secretary Dr Kamau Thugge said Treasury provides funding to ministries to carry out procurement in line with their budgets. Dr Thugge defended the government move saying leasing of medical equipment includes servicing charges and replacement of those that break down within the contract period.

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