March 2017 DailyNation; The budget for leasing medical equipment at the counties has been cut by Sh1 billion, setting the stage for a row between the government and multinationals supplying the kits.
The Budget and Appropriations Committee has cut the allocation of the leasing fees from Sh4.5billion set by the Treasury to Sh3.5 billion for the year starting July.
This would lead to delayed payments to the five contracted suppliers namely, General Electric, Philips, Bellco SRL, Esteem and Mindray Biomedical Company.
Under the deal, the Treasury was to offer an annual service fee of about Sh5 billion to the multinationals for supplying the kits worth Sh38 billion — a departure from previous medical deals that delivered a one-off upfront payment to the supplier after procurement.
The service covers equipment lease, maintenance and training over seven years.
Treasury has been delaying payments to the multinationals in what saw US giant General Electric fine Kenya Sh80 million for late settlement of leasing and servicing fees of the equipment.
“The Health Committee recommended the reallocation of Sh1billion from the (leased hospital equipment) project to other priority areas,” said the Budget and Appropriations Committee chair, Mutava Musyimi.
“It further recommends that the Auditor General undertake a performance audit on its implementations in a bid to address any emerging challenges and ascertain value for money,” he added.
Mr Musyimi said the cut and audit are informed by the ministry’s failure to provide leasing contracts, which the committee needs for budget allocation decisions.
The Health ministry had sought MPs’ approval of Sh5.1 billion to settle the leasing fees for the current year through the supplementary, but the request was shot down with the lawmakers agreeing to release Sh1.7 billion.