Taxpayers risk losing Sh3.84bn in KNH project
Senators have summoned outgoing Health Cabinet Secretary Sicily Kariuki after it emerged that the ministry illegally and irregularly signed a contract for provision of Sh4.9 billion Healthcare Information Technology (HCIT). The Office of the Attorney-General was not consulted and its legal advice to all government ministries, agencies and departments was disregarded.
The lawmakers summoned Ms Kariuki Friday morning, a day after she was expected before the Senate ad hoc committee on Medical Equipment Service (MES), of which HCIT is a component. She failed to appear before the committee on Thursday and said she was in a Cabinet sub-committee meeting.
After the ministry realised it had blundered by failing to involve the AG in negotiating and drafting the contract, and that the HCIT tender posed a high financial liability, it hurriedly cancelled it in July 2019. The latest revelations cast doubts on the validity of the other five MES contracts the ministry signed with foreign companies.
The MES contracts are all valued at about Sh62 billion.
Solicitor-General Ken Ogeto, who appeared before the ad hoc committee on Thursday, said it was only on September 21, 2018, almost a year after the contract had been signed, that the AG received a copy.
Mr Ogeto further told the committee, chaired by Isiolo Senator Fatuma Dullo, that the contract violated the Public Finance Management (PFM) Act and the Public Procurement and Asset Disposal Act of 2015.
Circulars the AG’s office issues government agencies on the need to consult his office before entering contracts were also ignored. The ministry also failed to undertake due diligence on the contractor before committing the government.
“The Office of the Attorney-General was not involved in negotiating, drafting, vetting, clearance and approval of the contract prior to the signature as is required by law and the various circulars issued to government accounting officers,” Mr Ogeto, the principal assistant to the AG, told the committee.
The HCIT contract was signed and executed by the Ministry of Health and Seven Seas Technologies on October 2, 2017, for development of health ICT infrastructure connecting all public hospitals to a central database.
Mr Ogeto said the AG became aware of the existence of the contract through a December 14, 2017 letter from the National Treasury, which sought legal clearance for issuance of a Government Letter of Support.
He said a copy of the contract was not provided.
Mr Ogeto noted that failure to observe applicable laws constituted a criminal act punishable by a fine not exceeding Sh4 million, a jail term not exceeding 10 years, or both.
Section 135 (2) of the Public Procurement and Asset Disposal Act requires an accounting officer to enter a written