Afya House paid Sh850m more for container clinics

National Youth Service officers walk next to some of the 99 container clinics that are still lying at the NYS camp in Miritini, Mombasa. PHOTO | FILE 

By BRIAN NGUGI, bnjoroge@ke.nationmedia.com

Posted  Monday, November 14   2016 at  21:39

IN SUMMARY

• The containers were bought in China, transported to Kenya and allegedly delivered to Nairobi at a cost of Sh1,461,388 – meaning the supplier pocketed Sh8.5 million for each unit sold to the government.

Estama Investments, the shadowy company at the centre of the controversial importation of 100 container clinics, spent Sh1.4 million to buy and import each unit that were then sold to the government at Sh10 million, official documents show.

Information contained in Estama’s filings with the Kenya Revenue Authority’s (KRA) digital platform, Simba, shows that the containers were bought in China, transported to Kenya and allegedly delivered to Nairobi at a cost of Sh1,461,388 – meaning the supplier pocketed Sh8.5 million for each unit sold to the government.

The revelation means that Afya House operatives colluded with the suppliers to pay Sh1 billion for the 100 prefabricated containers that cost Sh150 million to buy and transport to Kenya.

KRA documents show that Estama Investment, which was incorporated in Panama and its identity revealed in the Wikileaks Panama Papers, imported a consignment of 20 containers in November 2015 at a total cost of Sh29 million; including the Sh4.9 million it paid in customs duty and another Sh3.9 million in value added tax (VAT), insurance and freight costs.

Health secretary Cleopa Mailu had earlier said that Estama Investments supplied all the 100 mobile clinics and had been paid Sh800 million, pending the clearance of Sh200 million.

Dr Mailu said the contract to supply the 100 portable clinics was awarded to Estama on July 17, 2015 and it supplied the consignment by end of year, paving the way for payment.

“We, hereby, also confirm that the company provided the requisite tax compliance certificate as well as its PIN certificate as required during the procurement process,” he said even as he evaded questions on the cost of each mobile clinic.

Official documents show that each of the portable clinics was to be kitted well enough to offer maternal and child health services, including family planning, immunisation, as well as emergency and outpatient services.

The Ministry of Health had earlier remained non-committal on the actual cost of each of the units after an internal audit report indicated that the public may have lost millions of shillings on the contract.

The audit report raised queries on a number of purchases at the Ministry of Health in which the taxpayer may have lost up to Sh5 billion, including the purchase of the mobile clinics for urban slums.

The clinics, which were to increase access to health services in the slums, were to be part of the Devolution and Planning ministry’s plan to revamp the National Youth Service (NYS) and used to upgrade urban slums.

The NYS programme itself has turned out to be a major financial scandal in which the Kenyan public lost more than Sh1 billion.

More recently, it has emerged that 99 of the 40-foot mobile container clinics have been lying at Miritini in Mombasa, one year after they were sourced from China.

Documents had earlier shown that the prefabricated container clinics were made by Guangzhou Moneybox Steel Structure Engineering Company in China.

Estama raised a separate purchase order for Sh200 million on June 30 and got paid the same day, raising questions at whether due processes were followed at Afya House. Izaq Odongo, the head of curative and rehabilitative services at the ministry and on whose behalf payments for the clinics were signed, had earlier said the equipment arrived at the port of Mombasa but has not been distributed a year since being shipped in. Mr Odongo could not explain the delay or even why the ministry made the full payment before the equipment was delivered.

The fresh revelations are likely to put on the spotlight the capacity of the Treasury to monitor, detect and deter theft of public funds through the government-based IT payment system.

The Integrated Financial Management Information System (IFMIS) processes procurement and payment of goods and services bought by the government.Calls have mounted, including from legislators and doctors’ unions, for the Health ministry publish the procedures it followed in procuring the 100 mobile clinics.

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The Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) has demanded that the ministry should publish the policy direction, public participation and stakeholder involvement that approved the purchase of the container clinics meant to provide easy access to health services in slums.