Malaria drugs supplier sues Health ministry in Sh35.4bn claim

Health Cabinet Secretary Dr. Cleopa Mailu. Equip Agencies was awarded the two tenders in 1993 and 1995 before the government called off the deal, citing supply of substandard drugs. PHOTO | FILE 

By BRIAN WASUNA bwasuna@ke.nationmedia.com

In Summary

• Equip Agencies was awarded the two tenders in 1993 and 1995 before the government called off the deal.
• Justice Apondi awarded Equip Agencies Sh1.8 billion, and legal costs which the High Court deputy registrar Caroline Wattimah recorded at Sh446 million.
• Equip Agencies managing director Divyesh Patel has faulted Prof Muigai for failing to provide an explanation as to why the Sh35 billion has never been paid.

Nairobi-based supplier Equip Agencies has sued the Ministry of Health, demanding Sh35.4 billion as compensation for two botched tenders for the supply of anti-malarial drugs between 1993 and 1995.

The firm says it was awarded Sh2.3 billion by High Court judge Muga Apondi in 2011 as compensation for the two tenders, with interest of 18 per cent from March 1999, but that the Health ministry has refused to settle the amount despite demands.

The interest has seen the amount balloon to over Sh35.4 billion, which the firm wants included in the 2017-2018 budget.

Equip Agencies was awarded the two tenders in 1993 and 1995 before the government called off the deal, citing supply of substandard drugs.

Health PS Nicholas Muraguri and Attorney-General Githu Muigai who have been named as respondents in the suit are yet to respond to the suit.

“Our efforts to have the ministry engage us and/or pay have been futile. For instance, our advocates issued a letter dated September 13, 2016 to the Health CS and copied it to the AG demanding for payment which letter has never been responded to.

“On December 15, 2016 our advocates issued a further letter. On January 19, 2017 another letter was written by our advocates and another copy of certificate of order against government attached but the respondents have never responded,” Equip Agencies claims.

Justice Apondi awarded Equip Agencies Sh1.8 billion, and legal costs which the High Court deputy registrar Caroline Wattimah recorded at Sh446 million.

Then Attorney- General Amos Wako filed a notice of appeal against Justice Apondi’s judgment in August 2011, just three months before leaving office and being succeeded by Prof Muigai.

Equip Agencies now says it has been struggling to dig into its own pockets to pay the firms it sourced the anti-malarial drugs from in 1993 and 1995.

“Due to the magnitude of the debt, the amount owing should be included in the national budget for the financial budget and given that preparation for the said budget is going on in earnest, there is a likelihood that payment of the decretal sum may not be factored in it unless leave is granted to institute an order and the order is granted,” the firm adds.

It says Equip Agencies is facing closure due to the heavy debt burden arising from the botched supply deal with the government.

The firm claims that its creditors and banks have threatened to institute winding up proceedings and that it urgently needs the Sh35 billion award honoured to avoid going out of business.

Equip Agencies managing director Divyesh Patel has faulted Prof Muigai for failing to provide an explanation as to why the Sh35 billion has never been paid despite being furnished with a certificate of order against the government.
Mr Patel claims that Dr Muraguri is hiding behind provisions of the Government Proceedings Act, which prohibit creditors from attaching State property to recover debts, and wants the High Court to now intervene.