June 20, 2024

NHIF on spot over KSh1.4bn payment for ghost project

3 min read
NHIF on spot over KSh1.4bn payment for ghost project

NHIF on spot over KSh1.4bn payment for Karen Resource Centre project; that has not taken off since 2002

NHIF on spot over KSh1.4bn payment for Karen Resource Centre project; that has not taken off since 2002.

The National Health Insurance Fund (NHIF) is on the spot for paying Sh1.44 billion to architects and quantity surveyors for a project that has not taken off 21 years down the line.

The fund paid the professionals hired in 2002 to design the Karen Resource Centre for construction on a 20-acre land whose ownership has been in dispute since 2004.

The resource centre was to be built in 2002, and the then chief executive commissioned consultants to do feasibility studies, drawings, and designs for the project.

“The construction of the resource centre was yet to commence due to a lack of approval from the parent ministry and the land ownership dispute in court,” said NHIF chief executive Elijah Wachira.

“The commissioned architects and quantity surveyors moved to arbitration claiming they did work amounting to Sh734.5 million but the fee notes were not honoured by the NHIF.”

He said the NHIF later reached a consent with the consultants and Sh1.44 billion was paid to the claimants.

“I agree that there was a breach of the process where authorization to establish the resource centre from the parent Ministry was sought after the consultants had been commissioned,” he said.

“I suppose that after the ministry approved the Karen Resource Centre project, the NHIF had no choice but to pay for the bill that it had incurred in hiring the consultants.”

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Mr. Wachira said the NHIF board has since changed the yet-to-be-constructed project from a resource centre to the Karen Medical Centre of Excellence.

He told the Public Investments Committee on Social and Agriculture that the board approved the purchase of the 10-hectare land in Karen for Sh93.7 million in 2002.

“However, the ownership of the land is in dispute, and the matter is in court,” said Mr Wachira.

The Directorate of Criminal Investigations (DCI) launched investigations to establish whether there was fraud in the transfer of ownership of the land,” Mr Wachira said.

Meanwhile, Auditor-General Nancy Gathungu has flagged Sh1,444,687,484 being payments for drawings and designs for the proposed Resource Centre.

However, the construction of the Resource Centre has not commenced, 21 years since the acquisition of the land.

Ms Gathungu said although the issue had been discussed by the Public Investments Committee (PIC) in the last Parliament, no action appears to have been taken on the PIC recommendations that the NHIF should expeditiously pursue the prosecution and conclusion of the case to its logical conclusion.

“In the circumstances, the validity and existence of capital work in progress balance of Sh1,444,687,484 as of June 30, 2022, could not be confirmed,” Ms Gathungu said.

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