Seven Seas wants arbitration in Sh4.9bn health project dispute

Seven Seas Technologies Limited now wants Attorney-General Paul Kihara to appoint an impartial arbiter to unlock the dispute over its cancelled contract for the roll-out of the Health Care Information Technology (HCIT) system under the Managed Equipment Service (MES) project.

The Sh4.9 billion HCIT contract had been awarded to Seven Seas Technologies Limited, a local company, on October 2, 2017, before it was cancelled by the Ministry of Health last year after a dispute arose in the contract document.

KEY UHC PILLAR

The HCIT project, Kenya’s largest ICT project of national interest given to a local firm, is a key pillar to the delivery of Universal Health Coverage (UHC) goals that will ensure equitable access to healthcare services for all Kenyans.

It entails the use of ICT to deploy a hospital information system and supporting the ICT infrastructure to benefit public hospitals nationwide towards accelerating the achievement of the e-Health Strategy — a national healthcare IT blueprint.

The project was to have a significant impact towards health delivery similar to the Huduma Namba initiative.

HEALTHCARE COSTS

It contains substantial outcomes like the containment of healthcare costs — guaranteeing less financial hardships that in most cases have sunk poor Kenyans into excessive healthcare-driven debts.

However, on November 18, 2019, Health Principal Secretary Susan Mochache announced its cancellation, throwing the HCIT roll-out in limbo.

Unless the dispute is settled, it will either ground or delay and make the implementation of UHC, one of President Uhuru Kenyatta’s pet projects under the Big Four Agenda, more expensive to Kenyans.

The other projects are manufacturing, infrastructure, food and security.

Ms Mochache notes in the termination letter to Seven Seas Technologies Limited chief executive Michael Macharia that the contract contains several clauses which “impose obligations that do not conform to the tender documents.”

The bone of contention was a requirement in the tender documents that the government, through the National Treasury, provides Seven Seas with an original Government of Kenya support letter.

COLLATERAL

The support letter was to act as collateral — to allow Seven Seas to engage with financial institutions for the funding of the project.

Mr Macharia has, nonetheless, disputed the explanation advanced by Ms Mochache on account that the requirement of the GoK support letter was indeed an integral part of the tender documents.

He wonders why the government would go on to provide the support letter to all the other five foreign MES vendors and leave out Seven Seas.

Whether it is a contradiction to President Kenyatta’s ‘Buy Kenya-Build Kenya’ initiative, meant to promote local companies, is for the Ministry of Health to explain.

GO TO COURT

Mr Macharia has threatened to take the dispute to court in a move that can only delay further the UHC plan for the country.

In November and December last year, Health Cabinet Secretary Sicily Kariuki, on several occasions, failed to honour invitations to appear before an ad hoc committee of the Senate to explain the circumstances behind the cancellation of the HCIT tender.

She was also required to explain whether local companies are at a disadvantage to drive any significant projects for the country.

The ad hoc committee is chaired by Isiolo Senator Fatuma Dulo and has already indicated that it has not given up on a session with CS Kariuki.

But in an apparent change of heart, Seven Seas lawyer Mboya, Wangong’u and Waiyaki Advocates, in the December 13, 2019, letter to the Attorney-General, with relevant excerpts of the tender documents attached, wants the matter settled harmoniously.