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MPs raise eyebrows at Sh80 million counties’ medical equipment fine

A digital X-Ray machine is among Sh600 million medical equipment donated by the government to Busia hospitals

The controversy surrounding the procurement of health equipment for counties rages on after it emerged the Government has fallen behind payments, costing taxpayers Sh80 million.

Under the Managed Equipment Services (MES) project, the National Government was supposed to set aside Sh38 billion annually for the next 10 years to equip hospitals in the counties with modern equipment in a bid to make healthcare accessible to all Kenyans.

However, delays in payments systems seem to be costing the country millions in penalties, which may push the cost of the machines supplied and run by US-based General Electric (GE) up over the leasing period.

MPs are now appalled by the additional costs, raising questions about the contract signed between the Government and GE.

The Ministry of Health had requested that Sh5.1 billion be allocated to the fund for running of the specialised equipment in 96 hospitals that have been fitted with renal, X-rays, theatre and mammogram services under the MES project.

However, the Budget and Appropriations Committee last week refused to hand the Health Ministry Sh1.7 billion for the project, demanding details of the contract and explanations for the penalties charged by GE. “The committee recommends that Sh3.4 billion be approved towards the payment of GE Ltd, but rejected the balance of Sh1.7 billion which would be factored in the main budget,” the Mutava Musyimi-led budget team said.

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The MPs noted that the National Government’s bid to pay for the machines was against the Public Finance Management Act given the additional request would bloat the expenditure of the National Referral and Specialised programme by 77.6 per cent, exceeding the 10 per cent limit.

The Council of Governors had challenged the Government on the legality of the scheme, saying it was unlawful given that the law says conditional grants is money from the (national) Government, which is given to counties to use under certain conditions, but that the money was being used to hire machines.

The governors had initially declined the machines, saying they were not consulted and that some of their counties even lacked personnel to run them. They, however, eventually signed the deal.

MPs also complained that the ministry had made the request for additional funds even though it had not provided evidence of the contractual agreement on the project or the demand notice from GE asking Treasury to foot the Sh80 million bill.

Vice Chairperson of the Health Committee of the National Assembly Dr Robert Pukose, however, says the misunderstanding was cleared and the budget team approved the money.

This is despite the fact that the estimates tabled in Parliament still reflect a Sh1.7 billion cut.

“The allocation was reduced because we did not get the contract agreement, but this was later provided by the ministry and we got full funding,” said Dr Pukose. He explained that initially, the whole project was not fully funded by the exchequer and so some of the money was returned and carried forward, resulting in pending bills.

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Among the pending bills are four invoices to GE that accrued a Sh80 million penalty.

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