Lewis Njoka @LewisNjoka

Treasury has defended its move to increase the amount allocated to the controversial leased medical equipment scheme in the next financial year, saying it was correcting a shortfall in previous allocations.

It has allocated Sh7.2 billion to the Managed Equipment Scheme (MES) in the upcoming 2021/22 financial year which begins in July, Sh1 billion higher than the Sh6.2 billion the project received in current 2020/21 financial year.

Since financial year 2015/16 when the project began, the annual allocations have risen steadily to move from Sh3.08 billion that year to Sh7.2 billion this financial year.

“It is a contractual obligation. There was a shortfall in previous year’s allocations,” said Albert Mwenda, Director General of Budget, Fiscal and economic affairs. 

He said since the agreement was coming to the next financial year, Treasury decided to increase the funding so that the government would not default on its payments attracting penalties.So far, the government has spent Sh33.9 billion on the project, excluding the Sh7.2 billion allocated for 2021/22 financial year.

Mwenda spoke before the Senate on Finance and Budget Committee when a team from Treasury led by Cabinet Secretary Ukur Yatani appeared before it to shed light on the Division of Revenue Bill, 2021.Senators had demanded to know why the allocation to the medical equipment scheme kept on increasing yet it was expected to decline with time. 

National Treasury

Senators faulted the National Treasury for being overly keen to make the payments yet some of the medical equipment was yet to be delivered into the country since 2015. “Some equipment has not been delivered to date. For instance, there is ICU equipment meant for Meru County still stuck in Netherlands,” said Senator Millicent Omanga.

Kericho Senator, Aaron Cheruiyot accused Treasury of being too eager to fulfil their part of the contract by releasing payments even when the medical equipment suppliers were not keeping their part of the bargain. 

Treasury, however, defended itself from the accusation, saying it was awaiting the findings of several investigations being carried out on the scheme by government entities.