Ministry of Health Facing a Fresh Sh7 Billion Scandal

The Ministry of Health has been hit by a fresh scandal involving the loss of Sh7 billion taxpayers' money.

The scam reportedly involves the purchase of 37 CT scanners at an inflated cost of Sh227 million per unit under the Managed Equipment Service (MES), a deal between the Kenyan and Chinese governments.

Daily Nation reports that the procurement deal led to the loss of about Sh187 million per unit or Sh6.9 billion in total. A unit of CT scanner costs between 40 and Sh45 million at current market price.

The details of the fresh scandal emerged when Health Principal Secretary Peter Tum appeared before the National Assembly's Public Accounts Committee on Monday. He appeared before the team to explain the 2015/16 expenditure and revenue accounts at Afya House.

The PS told the team that even though the contract for the purchase of the medical machines was a government to government one, the ministry abandoned it and awarded the tender to Neusoft Medical Systems Co ltd, a Chinese firm. 

The Kenyan government contributed Sh1.7 billion in the deal under the agreement of economic and technical cooperation signed between the China Development Bank and the National Treasury, which translates to 20% of the total cost.

Despite health being a devolved function, the equipment remained in the hands of the National Government and county units were not involved in their procurement.

“Why are CT scanners treated differently from the MES? If not, why did the ministry fail to lease them the way it has leased others. Were there any reasons why they were not included? I am asking this because the ministry has gone ahead to procure CT scanners separately. Someone can conclude that the reason it was not included in MES was to create room for future rip-off of public funds,” asked Ugunja MP Opiyo Wandayi, who is the chair of Public Accounts Committee.

While the PS agreed that the CT scanners fall in the same category as imaging equipment covered in the MES, he said the ministry had planned to purchase the scanners under a totally different framework.

“I cannot say with certainty that CT scanners were not part of the MES deal. Funding may not have been there,” Mr Tum said.

He defended the inflated costs saying that it involves setting up of new buildings, air conditioners, special thermal film printer, report printer, warranty and spare parts for the scanners for a period of five years.