Treasury Cabinet Secretary Ukur Yatani has revealed why the State took over the running of Kenyatta University referral hospital stating that the learning institution had defaulted on a Ksh10 billion.

Yatani made the revelation in a statement released on Tuesday, December 28, in response to parliament’s directive that wanted the referral hospital to be returned to Kenyatta University.

Documents tabled in parliament exposed silent wars pitting the hospital board against the Kenyatta University (KU) management for control of the multibillion-shilling facility.

“The Kenyatta University Hospital constructed through an on-lent loan has since been taken over and is being managed by the national government to recover the loan amount after non-settlement of their arrears,” Yatani said in the latest public debt disclosures.

Yatani further stated that the conversion of the Kenyatta University Teaching, Research and Referral Hospital (KUTRRH) into an independent State agency is aimed at recovering $99 million (Ksh11.18 billion under prevailing rates) which the State borrowed from Export-Import Bank (Exim) of China on behalf of the university a decade ago.

This implies that the government will use revenue from the referral hospital to offset part of the loan owed to China’s Exim Bank and ease the burden on taxpayers.

Under the loan deal, Kenyatta University was offered the 20-year debt that had a grace period of seven years, and the first semi—annual repayment was due on September 21, 2018 with completion set for March 21, 2031.

President Uhuru Kenyatta —who had signed the loan deal on behalf of KU when he was Finance Minister in June 2011— gazetted the hospital as a parastatal under the Ministry of Health (MoH) on January 25, 2019.

The university had protested to parliament that its staff and students have been denied access to the facility especially when they need it for academic practicals.

Notably, the hospital as a parastatal under the MoH is not obligated to allow unlimited access to KU staff and students.