Mailu defends Afya House contract given to Uhuru kin

Health secretary Cleopa Mailu has defended the awarding of contracts reserved for marginalised groups to a company owned by President Uhuru Kenyatta’s kin.

Citing the affirmative action provided in the law, Dr Mailu said companies named in the Sh5 billion scandal have a right to do business with the government even as he sidestepped questions on their marginalisation status.

Sundales International Limited, which is owned by the President’s sister, Nyokabi Kenyatta Muthama, and a cousin, Kathleen Kihanya, was paid Sh41 million as part-payment for several tenders it won for supplies to the Kenya Medical Supplies Authority.

“A Kenyan is a Kenyan and therefore anybody can conduct business with any institution as long as there is no conflict of interest,” Dr Mailu told a Press conference at his Afya House office on Sunday.

“Those people who are doing business with the ministry have a right to do so. I don’t see a conflict of interest. I want to confine myself to the facts of the document,” he said.

Ms Kihanya had on Saturday said that their firm was awarded the contracts based on the Access to Government Procurement Opportunities (AGPO) policy, which sets aside 30 per cent of government contracts for disadvantaged groups among the disabled, women and youth.

Questions have, however, arisen on whether the company’s owners fall in the category of the disadvantaged.

The Public Procurement and Disposal Act defines “disadvantaged group” as persons denied by mainstream society access to resources and tools that are useful for their survival in a way that disadvantages them or individuals who have been subjected to prejudice or cultural bias.

Dr Mailu further disputed the figures contained in the draft audit report that unleashed the scandal, giving fresh numbers to justify the ministry’s position that no money was lost.

For example, he disputed the Sh889 million that the audit report says was diverted from the free maternity fund, saying that only Sh586 million was diverted.

READ: Revealed: Taxpayers lose Sh5bn in NYS-style Afya House theft

He added that the diverted funds were used to pay for medical supplies after all reimbursements to county governments were done.

A large chunk of these diverted funds were paid to Estama Investment Ltd to supply 100 portable medical clinics to slums. Dr Mailu defended the firm, saying the company was duly contracted by the ministry on July 17, 2015.

He added that they had also provided all the necessary documentation, including a tax compliance certificate and a PIN certificate.

“The company has supplied all the clinics as required in the contract and has since been paid up to Sh800 million. In this regard, the outstanding amount is Sh200 million,” Dr Mailu said.

He said that the clinics that are inside shipping containers are stored in a government depot in Mariakani as the sites in which they will be taken are being connected with power and water.

Dr Mailu further revealed that the unnamed vendor who was paid Sh265.7 million through Co-operative Bank was Lifecare Medics, a company associated with Paul Wanderi Ndung’u, the man behind Mobicom and one of the directors of a sports betting firm.

The audit report says the money was paid to Co-op Bank yet the real payees were not disclosed.

Dr Mailu now says that this was a letter of credit that the ministry opened for the company, which was importing special food supplements for persons living with HIV.

He said that the ministry deposited the money with the bank to be released once the goods were supplied.

“The opening of letters of credit is a standard and acceptable mode of payment for imported goods,” Dr Mailu said.

The audit report had indicated that the company had been paid Sh201 million for other contracts, taking the total payout it received to Sh408 million.

Dr Mailu also defended the overspending that the draft audit has put at Sh2.4 billion, saying that this was not a loss or theft.

Dr Mailu sought to cast doubts on the audit report further, saying they have “serious concerns as to the quality of the report and the probity of its methodology and findings.”

He added that he will appoint an independent auditor next week to review the draft audit.