Billions shillings of taxpayer’ money is going down the drain in the controversial Sh63 billion leased medical equipment services (MES) programme, a new report shows.
The report says some of the equipment that cost billions of shillings is still gathering dust while others are yet to be supplied despite the government having paid for them.
The report titled ‘The Leasing of Medical Equipment Project in Kenya: Value for Money Assessment’ was authored by the Institute of Economic Affairs.
The report concludes that Kenyans are not getting value for money in the ambitious project that was envisioned to equip health facilities with state-of-the-art machines.
The report puts Ministry of Health officials on the spot for what it calls lack of due diligence, arbitrary revision of project costs and violations of various provisions of the law.
MES involves leasing of assorted medical equipment – including ICU facilities, surgical theatres, radiology and renal equipment– to 104 select county and national government hospitals.
The seven-year contract was signed in May 2015 with an initial cost of Sh38 billion. The contract was reviewed along the way and the cost increased to Sh63 billion.
“Study findings indicate that a number of factors negatively impacted overall implementation of the MES Project, leading to poor service delivery results,” the report reads.
It said the project was doomed by failure on the ministry to carry out a comprehensive study of the disease burden and health infrastructure needs across all the 47 counties.
“Besides, lack of transparency on the entire project with regard to the terms and conditions of the contract and poor regulation of this typical public private partnership project increases financial and corruption risks,” the report says.
The Institute of Economic Affairs interviewed informants in counties, a supplier of the equipment and reviewed government documents, audit reports and conducted stakeholder mapping and public forum workshops on the programme.
It states that five years into the implementation of the project – and two years to the end of the contract – some equipment are either not being utilised or have not been delivered, surgical theater equipment was delivered and installed in Burnt Forest Subdistrict Hospital but was not being used for lack of a blood transfusion fridge for storage.
“What this means is that Uasin Gishu county is underutilising the equipment despite having 4,915 reported cases of road traffic injuries in 2017 and 5,345 reported cases of burns in which persons below five years accounted for 38 per cent,” the report says.
In Kapsabet and Nandi Hills hospitals, C-Arm equipment was not being utilised despite being paid for because of insufficient space. This, the report said, was a missed opportunity in reducing the cases of home birth deliveries.
Despite renal equipment being delivered in July 2016 to Kapenguria Referral Hospital in West Pokot, a physical verification revealed it had been installed but was idle. No reasons were given.
Other counties that are not utilising the equipment are Baringo, Kericho, Turkana and Vihiga. Various reasons including lack of skilled technical personnel, dearth of space and lack of electricity were cited for non-utilisation.
In Nandi county, six Sh390 million medical components for ICUs had not been delivered, despite the county not having ICU services.
The report questioned the rationale behind the sudden increase of the cost of the project from Sh38 billion in 2015 to Sh63 billion in 2017.
The hidden costs and the opaqueness by the Health ministry to explain the sudden increase raises the risk of corruption, the report said.
The Treasury has been deducting the money at source – grants from the Ministry of Health. Initially, Sh95 million per year was deducted from each county but the figure shot up to Sh200 million after revision of the contract.
“There are no details to explain these variations. The import of the former is that despite counties making equal payments of Sh95 million, they do not receive uniform sets of equipment,” it says.
The report adds, “Lack of clarity and gaps in the MES project design portend hidden costs whose burden may fall disproportionately to the county governments. Another notable gap is with regard to ownership of the medical equipment upon lapse of the project.”
Last year, former Health CS Sicily Kariuki told a Senate committee that the cost was reviewed upwards after the number of hospitals was increased and an automated system procured to link all the hospitals.
Governors, however, denied being consulted on both the initial and second contract. Early this year, the Ministry terminated a Sh4.9 billion contract that was to inter-link all the facilities.
It further notes that the programme could have been designed to fail at the inception stage when they Ministry failed to conduct needs assessment and disease burden in counties.
“The programme failed to acknowledge the diversity of, and unique, medical priorities and needs of each county. As such, the majority of governors underscored that a ‘one-size-fits-all’ remedy will not work,” it says.
Last year, Council of Governors chairman Wycliffe Oparanya told an ad hoc committee of the Senate that has been probing the programme since last September that the counties did not get the value for money for the deal.
Oparanya said that most governors were coerced into signing an MoU that sanctioned that deal. Some equipment, he said, was delivered at night.
The Kwame Owino-led institute said in the report that lack of documentation on the procurement processes at counties, inaccessibility of the Intergovernmental Agreement on leasing, lack of explanation on lease rentals and lack of specific details on medical equipment to be delivered put the project in doubt.
The institute recommended a special audit on the entire programme to ascertain whether the taxpayers got a raw deal.
“The objective of these audits is to assess whether county government spending on leased medical equipment is promoting prudent use of funds, achieving set targets and improving systems,” it said.
The medical equipment should be redistributed based on the needs assessment and the disease burden in every county, the report said.
“There is need for a redistribution of machines informed by the evaluation exercise earlier mentioned and based on availability of medical personnel and supporting infrastructure as well as health needs,” the report said.
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