The decision by the ministry of Health to controversially cancel a Sh4.9 billion Health Care Information Technology (HCIT) tender that had been awarded to a local company for implementation of a project under Managed Equipment Service (MES) has now drawn the attention of parliament.
This comes as it emerged that senior government officials could be out to frustrate the achievement of President Uhuru Kenyatta’s Universal Health Coverage (UHC) plan for Kenyans as well as arbitrarily lock out local companies from the project in favour of foreign one.
The HCIT contract was in October 2017, awarded to SevenSeas Technologies limited, a local firm.
It is a key component in the rollout of UHC and entails the use of ICT to deploy a hospital information system and supporting the ICT infrastructure to benefit public hospitals nationwide in accelerating the achievement of e-Health Strategy. Its delivery, therefore, is heavily dependent on technology.
However, a letter from Health Principal Secretary Susan Mochache of November 18, 2019, to SevenSeas Technologies limited CEO Michael Macharia terminated the contract over disagreements in the contract details.
The termination could see the government lose over Sh20 billion in Foreign Direct Investments (FDI) for the five years the company was required to rollout the project.
The FDI was to be through equity investments as several foreign firms had shown interest in partnering with SevenSeas to invest locally.
According to Ms Mochache, the requirement for an original copy of the GoK Support Letter to be given to SevenSeas so as to ring-fence the budgetary allocation for the project by the government and therefore, act as a guarantee, does not feature anywhere in the tender documents.
“It is overtly clear to the ministry that your firm lacks the requisite financial capacity to execute the HCIT contract and has been unable to mobilise any funding without a GoK Support Letter,” Mochache says in the letter as Mr Macharia vows to move to court in a move that could see the country lose billions in compensation.
“We are in touch with our lawyers even as we await the government response from our communication to them over the illegal termination,” Mr Macharia says.
The Nation has learned that the Senate Ad hoc committee investigating MES has summoned Health Cabinet Secretary Sicily Kariuki this Wednesday over the cancellation of the tender.
The CS, who declined to respond to our inquiries last week, is now required to give the background of the HCIT project, the inconsistency of the information her ministry provided to the committee.
“The CS is required to provide the reasons for the hurried termination of the contract a day after SevenSeas provided its evidence and the cost to the taxpayer,” a brief from the committee Chaired by Isiolo Senator Fatuma Dulo, reads.
Interestingly, Ms Mochache’s letter did not make any reference to Attorney-General Kihara Kariuki, the custodian of all government’s legal contracts.
Although the requirement of GoK Support Letter is part of the tender document in our possession, the ministry continues denying it.
The investments in SevenSeas by foreign companies were dependent on the Government of Kenya meeting its commitments.
Documents submitted to Senate committee by SevenSeas show that Competition Authority of Kenya (CAK) had on June 26, 2019, approved Africa Healthcare Master Fund PTE Limited, a Japanese firm to invest Sh250 million in SevenSeas for the HCIT project.
About Sh2.5 billion is to come from a Japanese fund, which is over and above the investment by Toyota, Abraaj, a Dutch Company and other private Kenyan individual investors.
But with the lack of commitment from the government and the attendant confusion, the investments could go elsewhere.
It should also be noted that SevenSeas was the only local firm to have gotten a tender of that magnitude from the government and among the few if not the only one to have been contracted under MES.
It is now believed that wheeler-dealers in government are hell-bent on ensuring that a foreign firm preferably Chinese, gets the tender in a move that could sound destructive to the local companies.
This will also effectively render the meaningless the mantra of buy key build Kenya, which President Kenyatta has been advocating.
The begging question, therefore, is- how do we plan to build the ICT industry in the country when its bedrock is going to overseas firms?
“How does the government intend to achieve UHC when it is frustrating this local company? It is risky to give this contract to a foreign company because there will be loads of data sited in the HCIT system,” Nominated MP Godfrey Osotsi, an ICT expert, warns.