Richard Ngatia's Megascope at the heart of 5.4 billion Minsitry of Health scandal

Richard Ngatia’s Megascope at the Heart of 5.4 Billion Ministry of Health Scandal

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President Uhuru Kenyatta’s ally and owner of Megascope Ltd Richard Ngatia is at the centre of a multi-billion Ministry of Health tenders, yet again.

According to a senate Health Committee report, Ngatia’s firm Megascope Health Ltd received huge payments from the leasing of medical kits to the tune of 63 billion shillings.

The damning report gives a scathing report on the Ministry of Health for running a criminal enterprise and wants the Ethics and Anti-Corruption Commission to investigate.

The questions Kenyans are asking themselves now is how powerful and influential is Richard Ngatia within the corridors of Ministry of Health and State House?

The senate was told that the Ministry of Health entered into an agreement for the supply, delivery, installation, commissioning, maintenance and repair of the Lot 1 theatre equipment at a cost of 4.6 billion shillings.

The leasing of the theatre equipment including anaesthetic machines and ventilators were to benefit 96 hospitals spread across the 47 counties.

How Megascope got the multibillion Contracts

Ngatia, a wheeler dealer who has deeply rooted connections with the powers that be, managed to get a subcontract from the original contractor Shenzen Mindray Biomedical Electronic Co., a Chinese company.

President Uhuru Kenyatta’s ally Richard Ngatia is at the centre of a multi-billion Ministry of Health
President Uhuru Kenyatta’s ally Richard Ngatia is at the centre of a 5.4 billion Ministry of Health. Image/Courtesy

The cost of the initial 4.6 billion shillings was pushed to 5.4 billion shillings by unscrupulous Ministry of Health officials who added another 17 hospitals to the 96 included in the initial contract.

The senate health committee said that the Megascope subcontract was littered with ‘criminal enterprise like’ tactics applied when one wants to ‘circumvent the procurement process.’

The report noted that: “The committee finds that the contract and the subcontractor’s deed of warranty were used to circumvent the procurement process by awarding the subject matter of the contract to Megascope, a party that would otherwise not have qualified to be awarded the contract as per the term of the tender that required bidders to be original equipment manufacturers,”

The subcontracting of the medical equipment deal to Megascope was done against the laid down procurement laws as the company has no qualification and capacity to handle such medical equipment.

“Due to the foregoing the subcontractor, Megascope, through the transfer of ownership of the equipment, ended up becoming the principal in a contract that it would otherwise not have been qualified to win,” the senate report further states.

The blame now lies squarely with the Ministry officials including former Health Cabinet Secretaries Cleopa Mailu, Cicily Kariuki and James Macharia.

“The Ministry of Health was negligent when it signed an amendment and restatement deed that limited its rights under the contract.” notes the report.

“The committee therefore recommends that the EACC investigates the circumstances surrounding the implementation of the contract relating to Lot 1 and in particular the change of ownership of equipment from the contractor, Shenzhen Mindray, to the subcontractor, Megascope, and the cost of the equipment supplied under Lot 1,” the report states.

Grossly exaggerated cost of equipment

From the report, the health adhoc committee wondered how the cost of linen trolleys leased to the government stood at Ksh. 306,637 per linen trolley when the average market cost for one stands at between Sh5,000 -15,000 depending on quality.

The report indicts Megascope for supplying the government two linen trolleys at a cost of Sh613,272 under the MES Project.

“Despite the fact that linen trolleys are basic equipment, the computed costs of the linen trolleys as submitted by the contractor included costs of training, maintenance, delivery, transport, insurance…” said the report.

The blame now lies squarely with the Ministry officials including former Health Cabinet Secretaries Cleopa Mailu, Cicily Kariuki and James Macharia.
The blame now lies squarely with the Ministry officials including former Health Cabinet Secretaries Cleopa Mailu, Cicily Kariuki (Pictured) and James Macharia. Image/Courtesy

The committee concluded that Megascope reaped the government off since most of the equipment from the Lot1 contract was not functioning.

“The committee therefore observes that there is a likelihood that the MoH may have overpaid the contractor for equipment supplied under this Lot contrary to Article 201 of the Constitution which obligates public entities to ensure prudent use of public resources,” the committee noted.

The senate report comes hot on the heels of Megascope being heavily linked to the KEMSA’s 7.8 billion shilling Personal Protective Equipment scandal currently under investigation.

Ngatia who is the CEO of Megascope is the president of the Kenya National Chamber of Commerce and Industry.

 

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