Members of Parliament (MPs) have expressed concerns regarding the Ministry of Health’s procurement process for the Integrated Healthcare Information Technology System (IHTS), a key component of the Universal Health Program.

They have in particular questioned the Sh104.8 billion contract set to be implemented over 12 years, with Safaricom PLC as the lead partner in the consortium responsible for the project.

The procurement was conducted under the Specially Permitted Procurement Procedure (SPPP) and involved the development of a comprehensive digital healthcare platform.

However, members of the Health Committee have questioned the role of Safaricom PLC in leading the consortium despite its limited stake in the project—approximately 13%—while Apiero Limited holds more than 50%. The consortium also includes Konvergenz Network Solutions.

Potential corruption

The lawmakers asked the Attorney General not to approve the contract, citing concerns over potential corruption, and single-sourcing, where due process was not followed including public participation in the process.

Committee chairperson Dr Robert Pukose (Endebess) raised doubts over Safaricom PLC’s involvement, suggesting that the telecom giant may be lending its name to boost the credibility of its consortium partners, such as Apiero Limited, which lacks experience in managing large-scale healthcare IT systems.

“Although Safaricom PLC’s role appears minimal, it seems to serve as the public face of the project, potentially masking the inexperience of its partners,” Pukose said.

He said the committee will be inviting the Health Cabinet Secretary and the Principal Secretary, to appear before the committee on Monday next week, to explain the rationale for opting for single-sourcing.

Pukose also questioned why the ministry bypassed the existing National Hospital Insurance Fund (NHIF) IT system, which has been functional, in favour of this new system.

“How comes the ministry decided to sideline the NHIF IT system, which he has been effectively serving the public?” posed Pukose. He further noted that trials of the new system in Marsabit and Tharaka Nithi counties have yielded poor or no results.

“They’ve tested the new system in Marsabit and Tharaka Nithi counties, and it failed. It’s unclear why the ministry is insisting on replacing a system that has been working. Instead, they should be focusing on enhancing the current NHIF IT system to include all registered members,” he said.

Gradual implementation

Pukose urged the ministry to reconsider its approach, suggesting a gradual implementation of any new systems rather than an abrupt overhaul of the existing framework.

The committee resolved to summon Cabinet Secretaries John Mbadi (Treasury) and Dr. Debra Mulongo Barasa (Health), and the AG, to clarify discrepancies in the technical evaluation process.

“We expect them to appear before the committee on Monday, September 30, 2024, to address our concerns regarding the procurement of the Integrated Healthcare Information Technology System,” Pukose stated. He also noted the absence of a formal response from the Attorney General regarding the legal clearance of the contract.

‘Appeared flawed’

“The process appears flawed. From what we’ve seen, this looks like a fraud in the making. That’s why we need full transparency before we make any decisions,” he concluded.

Kitutu Chache South MP Anthony Kibagendi, emphasized the need for the committee to determine whether the AG had cleared the execution of the contract in question.

Kibagendi noted that a review of the contract documents revealed the Attorney General’s office was not involved, underscoring the severity of the matter and the potential corruption within the ministry.

“The Health Cabinet Secretary did not inform the Cabinet or the National Treasury about this project, as required by the Public Procurement and Asset Disposal Act,” he stated.

He further accused the Ministry of Health of bypassing procurement laws through single sourcing, awarding the contract to companies with no prior experience in implementing social health authority systems.

He also noted that many of these companies were recently registered in Kenya.

Kibagendi questioned why Safaricom was uniquely identified as a strategic partner, even though its expertise does not align with the core aspects of the tender, such as claims management, telemedicine, and emergency response.

Tripartite relationship

“While Safaricom is the lead bidder, the majority of the work is being carried out by Apiero Limited, a partner in the tripartite consortium,” he said.

“The Ministry’s decision to award the tender based on Apiero’s experience is questionable, as the company has no direct association with similar systems.”

He raised further concerns about the lack of clarity regarding who owns the procured system and how the consortium plans to recover its investment under the strategic partnership with the Ministry of Health.

“Regulation 107 of the Public Procurement and Asset Disposal Act clearly states that the National Treasury may permit such procedures if they serve national security or public interest. Yet, the process lacked transparency and accountability, and none of these companies have delivered a system of this scale anywhere in the world.”

Seme MP, Dr. James Nyikal, raised concerns about the need for a new IT system, given that the now-retired National Health Insurance Fund (NHIF) system was still operational.

“We need to understand why this new system is necessary, who will fund it, and whether funds collected through Social Health Insurance will be diverted for this purpose,” said Nyikal.

“What was wrong with the previous system, and why was it discontinued? If a new system is truly needed, why resort to the Specially Permitted Procurement Procedure?”

Kisumu Central MP Joshua Oron echoed these concerns, particularly about the lack of scrutiny over the ERP component in the consortium agreement between Safaricom, Konvergenz Network Solutions, and Apiero Limited. Safaricom’s financial proposal stood at Sh. 104.8 billion, including taxes.

“This deal reeks of corruption. As a committee, we must act to prevent this from proceeding. We support the launch of the Social Health Authority (SHA), but it should continue using the existing system until the proper procedures are followed.”