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Health ministry’s blunder will cost taxpayers Sh2bn

Wednesday November 13 2019
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A notice outside the Ministry of Health's headquarters in Nairobi warns against corruption. PHOTO | FILE | NATION MEDIA GROUP

By BRIAN WASUNA

The taxpayer will have to foot a Sh2.1 billion bill to a medical supplies firm after a series of  blunders by the Ministry of Health.

The ministry refused to pay for dialysis equipment sold to the government seven years ago by Rockey Africa Limited.

CONTRADICTED

When the firm delivered the machines in Kisumu, Mombasa and Nakuru hospitals in 2012, the bill was Sh362 million. But it has now run into billions of shillings after the cat-and-mouse games employed by the ministry when it was time to meet its end of the deal.

Apart from the delays in payment, government officials gave contradicting accounts of the deal with Rockey Africa, which in the end worked in the firm’s favour.

In 2016, Rockey Africa sued the ministry after several failed promises. The ministry’s defence would, at least to a layman, raise questions.

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The replying affidavit filed by the Attorney-General contradicted the testimony by the ministry’s chief witness, the assistant manager, supplies, Mr John Kamau.

The ministry denied that it owed Rockey Africa the money, or that the debt was to be paid within 60 days of delivery. It also claimed the firm breached the contract by supplying defective goods.

The AG accused Rockey Africa of supplying air, which was later contradicted by the chief witness.

VERIFICATION

The AG claimed the firm did not attach proof of the medical supplies being received by the designated ministry official.

The affidavit also claimed that some of the equipment was not delivered.

But when Mr Kamau took to the stand as a witness, the story changed entirely.

He admitted that the ministry entered into a contract with Rockey Africa and that the firm had not been paid.

Rockey was entitled to interest at 20 per cent per quarter for late payment, he stated. Mr Kamau said the ministry’s verification committee had confirmed the equipment was in good condition.

He also produced delivery notes in court to confirm the supplies got to government hospitals.

20PC INTEREST

The inspection committee even found that some hospitals had received an oversupply of the machines.

High Court judge Wilfrida Okwany found that not only was the equipment delivered as per the contract, but that the ministry found them to be in mint condition before they were put into use in various hospitals.

What could hurt the taxpayer most, is why the government institution agreed to high interest rates that were to be charged per quarter and not per year in the event of default.

With Justice Okwany’s order that the ministry pay the full Sh362 million with interest of 20 per cent per quarter from July, 2012, taxpayers will yet again be forced to dig deep into their already struggling coffers to fork out billions for the blunders of a few officials.

GOOD ORDER

“Mr Kamau was categorical that all the contracted goods were supplied by the plaintiff to various government hospitals and that the said goods were inspected and found to be in good order. I am therefore satisfied that the plaintiff proved its claim for the sum of Sh316,891,900 on a balance of probabilities. Strictly speaking, the defendant admitted the plaintiff’s entire claim during the hearing of the case.”

“On the applicable interest rate/penalty for late payment, Mr Kamau confirmed that the penalty for late payment was 20 per cent per quarter on the contract amount. In fact, Mr Kamau was categorical that the plaintiff is entitled to the contract amount plus interest at 20 per cent,” Justice Okwany ruled.

PROCUREMENT

Mr Kamau, who was the ministry’s witness, produced delivery notes in court to confirm that the equipment actually got to the various hospitals government acquired it for.

Rockey Africa was contracted to supply needles, gauges, drugs trollies, refrigerators among other equipment following a procurement process.

The supplies contract was signed in June, 2012.

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