From MES to NESP: Mystery of the multi-billion medical equipment leasing deal by MoH Part Two

In our Part One series dubbed ‘Mystery of the multi-billion medical equipment leasing deal by the Ministry of Health (MoH)’, we highlighted how the Universal Health Coverage (UHC) national healing scheme to the ailing national healthcare infrastructure anchored on the inaugural Managed Equipment Services (MES) programme mooted in 2015 at a cost of Sh39billion and ended up at Sh63billion in just nine years has since transitioned into the now controversial National Equipment Service Project (NESP).

Now, NESC is fully under the management of the national government informing governors have now come out saying they “had no choice” amid new revelations that counties were kept in the dark regarding details of the agreements including identity of the contractors whom our investigations have since established are seven in number.

Senators have raised concerns over the legality of multi-billion-shilling contracts signed between counties and the national government for the lease of the new medical equipment aimed at supplying medical devices to county hospitals under the National Equipment Service Project (NESP).

However, lawmakers are questioning the transparency of the process and the potential financial impact on healthcare delivery in Kenya.

While appearing before the Senate Public Accounts Committee (PAC) on Tuesday this week, December 3, 2024, Nyeri governor Mutahi Kahiga, who is the vice-chairperson of the Council of Governors (CoG) blew the lid off over the new medical equipment leasing deal under National Equipment Service Project (NESP) terming it as shadowy.

He admitted that county governments were left with little choice but to sign the contracts, despite being kept in the dark about crucial details, including the identities of the suppliers.

Kahiga described the situation as a “desperate move” due to the failure of the previous Medical Equipment Service (MES) project, which saw billions of shillings lost on faulty equipment.

Senate PAC chairman Moses Kajwang demanded clarity from the governors, asking how the decision to procure the medical equipment was made and under what legal framework.

“How was the decision made and under what procurement law? How sure are you that the cost of running the equipment constitutes value for money?” Kajwang posed adding that it would be difficult to defend devolution if governors allowed such opaque arrangements.

Kahiga explained that counties were left with no choice but to agree, citing financial constraints that made it impossible for them to purchase the required medical equipment.

“We had no option but to sign the deal. Counties do not have the funds to buy this equipment,” Kahiga told the committee

“We did not procure the machines, it’s the Ministry of Health that did the procurement. They even put out advertisements in the newspapers. We were not involved.” He added.

Kahiga further explained that counties were asked to select from 23 lots of equipment needed for local hospitals, but it was only after making these selections that they learned which companies would be providing the machines.

“What they have done is set 23 lots of equipment, so you pick a lot that you think is required for your specific hospital. After picking, you know the providers.” Kahiga said.

“But whoever selected them, that was a programme decided by the national government. We are just landlords.” He added.

He stressed the urgent need for dialysis machines in county hospitals, warning that without them, patients were at risk.

“Currently, dialysis machines are not working in the county government hospitals because the equipment provided under MES has run its course. Anyone that is being put in those machines is risking their life.” Kahiga said.

The NESP, launched as a successor to the controversial MES, aims to provide medical equipment to county hospitals on a leasing basis.

Under the scheme, an undisclosed supplier will install machines in county facilities and receive payments directly from the contentious Social Health Authority (SHA).

However, critics have expressed concern that the leasing fees may consume most of the funds allocated to healthcare, leaving counties with minimal resources for actual healthcare delivery.

Senators have described the NESP as “opaque” and akin to the MES scandal, which saw the Kenyan government spend Sh63 billion on dysfunctional medical equipment.

At least 37 counties have already signed agreements with the Ministry of Health to supply the medical gadgets, but the identities of the suppliers remain unclear.

When contacted for comment on October 23, 2024 during our initial broadcast dubbed ‘From MES to NESP: Mystery of the multi-billion medical equipment leasing deal by MoH Part One’, Health Cabinet Secretary Deborah Mulongo Barasa did not respond to our queries.

Subsequently, when separately contacted for comment on October 30, 2024 by The Informer Media Group, neither Medical Services Principal Secretary Harry Kimtai nor his Public Health and Professional Standards Principal Secretary Mary Muthoni responded to our queries to date about the new medical leasing criteria and identity of the vendors and the procurement process.

However, in what is shaping up to be a new multibillion deal shrouded in secrecy, governor Kahiga informed the Senate PAC committee that the Ministry of Health had driven the NESP, with limited input from governors effectively sidelining their input.

In one of our queries, we sought to know if the county governments made recommendations to the Ministry

of Health on the priority health needs of their respective counties to inform the most ideal medical equipment for service provision in the different parts of the country in the new medical leasing deal but no response has been forthcoming for over a month now.

And in what now points to exclusion of county governments involvement in the lucrative venture aimed at addressing healthcare needs in their respective devolved units, governor Kahiga told PAC committee that the ministry handled the procurement process and presented a small group of governors with information about the project.

“We were caught up in a situation in which we know the food is bad and might harm us but it is better that we eat.” Kahiga said noting the urgency of the decision despite its potential drawbacks.

During the session, Nyeri County Attorney Kimani Rucuiya also raised concerns about the legality of the deal.

Rucuiya, who chairs the County Attorneys Forum, argued that the agreement violated the Constitution and procurement laws, pointing out that the Intergovernmental Participation Agreement (IPA) should have preceded the procurement process.

“The government violated the constitutional mandate by directly procuring a function that is devolved.” Rucuiya said.

Despite these concerns, Kahiga defended the governors’ actions, explaining that they were caught between the need to provide essential services and the lack of alternative solutions.

“It was the best option for now.” Kahiga said.

Senators criticised the deal as shady.

Busia Senator Okiya Omtatah demanded that Kahiga specify the legal clauses that allowed counties to sign the agreements.

Isiolo Senator Fatuma Dullo accused the governors of not fully understanding the programme’s operations, suggesting that the deal could be worse than the MES scandal.

“It appears you are confused and don’t know how the programme run.” Dullo said.

Nandi Senator Samson Cherargei criticised the governors for cooperating with the national government in a way that undermines the Constitution’s Fourth Schedule, which outlines the functions of county governments.

“You should resist this attempt to claw back county functions by the national government. If we allow that, then we will be killing devolution.” Cherargei warned.