Some of the controversial 99 mobile clinics containers lying at Mathari National Teaching and Referral Hospital in Nairobi in this photos taken on October 5, 2019. FILE PHOTO | NMG
Summary
- The prefabricated container clinics were made in China by the Guangzhou Moneybox Steel Structure Engineering Company on behalf of local firm, Estama Investments Ltd, which was awarded the contract in July 2015.
- The containers were purchased to increase access to health services in slums and rural areas.
- The supplier, Estama Investments, was to supply, install, commission and hand over the portable clinics at a cost of Sh1 billion.
Criminal investigations into the controversial Sh1 billion portable clinics have stalled after the Chinese government failed to offer Kenya information on the purchase and pricing, frustrating efforts to prosecute persons and firms behind the irregular deal.
The Ethics and Anti-Corruption Commission (EACC) says China has snubbed Kenya’s request for Mutual Legal Assistance (MLA)—a pact between two or more countries for gathering and exchanging information for enforcement of criminal laws.
This has made it difficult for the anti-graft agency to establish the actual cost of the 100 containers that have been lying idle for nearly five years.
The prefabricated container clinics were made in China by the Guangzhou Moneybox Steel Structure Engineering Company on behalf of local firm, Estama Investments Ltd, which was awarded the contract in July 2015.
The containers were purchased to increase access to health services in slums and rural areas.
The supplier, Estama Investments, was to supply, install, commission and hand over the portable clinics at a cost of Sh1 billion.
An audit revealed the ministry paid Sh800 million for the portable clinics before installing, commissioning and handing them over.
The payment contravened the agreement between the ministry and the supplier, triggering the EACC probe.
Twalib Mbarak, the EACC chief executive, told Parliament that the commission had made efforts through the Chinese Embassy in Kenya and other informal networks to facilitate the expeditious servicing of the MLA request by peer agencies in China. The MLA is yet to be serviced.
“The commission undertook the investigation in two phases: criminal investigations, which was phase one, and civil recovery,” said Mr Mbarak said yesterday.
“The criminal investigations focused on the procurement process, payments and confirmation of the supply. All the local aspects of the investigations have been concluded.
The EACC obtained documents from the Ministry of Health, various banks, Registrar of Companies and recorded statements from 58 persons of interest in this matter.”
The commission is awaiting the response to the MLA request from China to back up the criminal investigations and forward the file to the Director of Public Prosecutions for his independent review and advice, Mr Mbarak said.
This will set the stage for prosecution of top public officials and directors of firms found to have breached the tendering agreements.
The EACC said the Chinese response on the MLA request is critical in determining the criminal culpability of the suspects.
The Ministry of Health, through restricted tendering, awarded the contract for supply of the 100 portable containers to Estama Investments in June 2015 at a cost of Sh10 million per unit.
Kenya Revenue Authority (KRA) filings revealed Estama Investments spent Sh1.4 million to buy and import each of the container clinics that were then sold to the government at Sh10 million each.
The taxman had also taken Estama to court seeking to freeze its bank accounts for alleged tax evasion.
In the civil recovery phase, Mr Mbarak said, the EACC entered into an out-of-court negotiations to recover Sh400 million that was paid irregularly.
The Health ministry has so far paid Estama a total of Sh800 million, leaving an outstanding balance being Sh200 million.
The EACC’s valuation put the value of the 100 prefabricated container clinics at Sh140 million while the value of assorted furniture and medical equipment at Sh168,860,000 bringing the total cost of 100 containers at Sh308.86 million.
Mr Mbarak said EACC filed a civil suit for recovery of the Sh400 million being the difference between the amount paid and the valuation of the portable clinics.
The EACC told the Senate committee on Health that the defendants in the case made an application for settlement through the Alternative Dispute Resolution.
The parties have been granted up to January 18, 2021 to settle the matter and they have held a number of meetings to try to reach an agreement.
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