KNH deal with rogue suppliers saw taxpayers lose Sh30m

Thursday October 10 2019

Kenyatta National Hospital acting Chief Executive Officer Evanson Kamuri addresses the media on May 31, 2019. PHOTO | FILE | NATION MEDIA GROUP


Taxpayers lost Sh30 million after Kenyatta National Hospital (KNH) entered into a contract with three different companies which later failed to deliver, despite receiving down payments.

In the first case, the hospital is facing a daunting task of recovering Sh13,727,655 from Glotex Medical Kenya Ltd, which it got into a contract in 2003 for the supply of nuclear medicine, equipment and accessories.

KNH paid Sh13 million up front to a company that is not registered to supply nuclear medicine materials.

The supplier then failed to deliver the materials and for 16 years, the hospital has been chasing the firm for a refund but has not been successful. Indications are that it will not get back the money.

Documents of an audit report for the financial year 2017/2018 currently before the National Assembly’s Public Investments Committee indicate that it has been established through the Registrar of Companies that the firm is not registered and therefore it is not possible to institute legal action against a non-existing entity.

In a letter dated May 13, KNH asked the National Bank of Kenya to furnish them with signatories to the account held by Glotex and name of the person who cashed the cheque to enable it recover the money. The request was not granted.


In 2001, the hospital also entered into a contract with High Voltage Communication Ltd for the supply, delivery and installation of submersible pumping equipment into helipad borehole and deflouridation plants for boreholes at helipad and laundry.

The hospital made an advance payment of Sh15,792,611 but the company failed to complete the work without a good reason, leading to a dispute between the two parties. The matter was referred to arbitration as was provided in the contract, where KNH won and was awarded Sh14,876,645 in November 2012, but to date, the hospital has not been paid.

In a letter dated May 13, the hospital wrote to the anti-graft commission seeking an update on investigations into the matter but is yet to get any feedback.

In the third case, taxpayers lost Sh2,213,309 paid to Microtec Office Supplies for delivery and installation of microfilm equipment and to microfilm inactive medical records.

Despite KNH paying 60 per cent of the amount, the company only did 30 per cent of the work.

In a letter dated May 14, KNH acting chief executive Evanson Kamuri said the three firms’ files “had gone missing” from the registrar of companies.

“It is within our knowledge that the cited companies’ files have gone missing from the Registrar of Companies electronic database after application for an official search of the same. The hospital is following is following on the signatories to the accounts so as to recover the amounts advanced due to breach of contract,” Dr says in the letter.

The hospitals’ effort to get help from the various banks where the monies were deposited has also proved futile.