Call for medical kits leasing deal audit as cost hits Sh63 billion

Kwame Owino
Institute of Economic Affairs (IEA) CEO Kwame Owino. PHOTO | DIANA NGILA  

An economic think tank has called for an audit of the leasing of medical equipment for specialised healthcare project to avert loss of taxpayers’ money.

The Institute of Economic Affairs (IEA) warned that the secrecy surrounding the multibillion-shilling project and unexplained cost variations are signs that taxpayers may not get value for money.

This recommendation came amid revelations by the Ministry of Health (MoH) that theatre and radiology equipment leased to counties was lying idle due to a lack of electricity, specialists and water in the hospitals.

“There’s need for the Office of the Auditor-General to conduct special audits of the Managed Equipment Services (MES) project … which will serve as a midterm evaluation,” IEA chief executive Kwame Owino said yesterday during release of report assessing value for money on the MES project.

The government in 2015 contracted six private firms to supply, install and train medics on different sets of medical equipment for seven years.


Shenzhen Mindray Bio-Medical Electronics Limited, Esteem Industries, Bellco SRL, Phillips East Africa Limited and General Electric East Africa Limited were contracted to provide the kits and service for Sh38 billion.

Four years on, the cost of the project has shot to Sh63 billion with no explanation on whether the adjustments are inclusive of suppliers’ obligation and installation of equipment.

“Lack of transparency in the entire project with regards to terms and conditions of the contract and poor regulation … increases financial and corruption risks,” said Mr Owino.

The five firms have already pocketed Sh26.77 billion even as the kits continue to lie idle amid counter-accusations between the ministry and counties over lack of consultation before the project launch.

The deal running to 2021 entails leasing theatre, renal, ICU and radiology equipment to counties. Counties will pay Sh131.9 million in the year to June 2020 for the leases.

Each of the 47 counties paid Sh95.7 million for the kits in the 2015/16, 2016/17 and 2017/18 financial years.

The IEA has questioned why counties pay uniformly for the equipment despite not getting an equal number of medical kits.

Governors have accused the ministry of failing to avail information, adding that they were never consulted in the procurement of the equipment.