The Budget and Appropriations Committee has cut the allocation for the leasing fees from Sh4.5billion set by the Treasury to Sh3.5billion for the year starting July.
This would lead to delayed payments to the five contracted suppliers namely; General Electric, Philips, Bellco SRL, Esteem and Mindray Biomedical Company.
The Treasury has been delaying payments to the multinationals in what saw US giant General Electric fined Sh80 million for late settlement of leasing and service fees of the equipment.
The budget for leasing medical equipment at the counties has been cut by Sh1 billion, setting the stage for a row between the government and multinationals supplying the kits over delayed payments that has led to fines.
The Budget and Appropriations Committee has cut the allocation for the leasing fees from Sh4.5billion set by the Treasury to Sh3.5billion for the year starting July.
This would lead to delayed payments to the five contracted suppliers namely; General Electric, Philips, Bellco SRL, Esteem and Mindray Biomedical Company.
Under the deal, the Treasury was to offer an annual service fee of about Sh5 billion to the multinationals for supply of the kits worth Sh38 billion— a departure from previous medical deals that delivered a one-off upfront payment to the supplier following a procurement.
The service covers equipment lease, maintenance and training over seven years, but Kenya has delayed payment prompting fines.
The Treasury has been delaying payments to the multinationals in what saw US giant General Electric fined Sh80 million for late settlement of leasing and service fees of the equipment.
“The Health Committee recommended the reallocation of Sh1 billion from the (leased hospital equipment) project to other priority areas,” said the Budget and Appropriations Committee chair, Mutava Musyimi.
“It further recommends that the Auditor-General undertake a performance audit on its implementations in a bid to address any emerging challenges and ascertain value for money.”
Mr Musyimi said the cut and audit are informed by the ministry’s failure to provide the leasing contracts, which the committee needs for budget allocation decisions.
The Health ministry had sought MPs’ approval of Sh5.1 billion to settle the leasing fees for the current year through the supplementary, but the request was shot down, with the law makers agreeing to release Sh1.7 billion.
The Sh38 billion leasing involves the supply of diagnostic imaging equipment such as X-rays and ultrasound machines for 98 hospitals nationwide.
The firms were expected to earn slightly more than Sh5 billion annually in leasing fees.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
