How Richard Ngatia’s Megascope Healthcare Ltd ripped-off taxpayers millions in medical leasing equipment

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The Kenyan senate has finalized its report after lengthy interviews and investigation of medical leasing equipment leased to counties launched by president Kenyatta in 2015. However, the deal has morphed into monumental scandal attracting scrutiny from Kenyans and ultimately the Kenyan senate investigations and barrage of media reports especially when key jubilee government funders are at the center it.

In its damning report, the senate terms the controversial managed equipment service – MES deal ‘criminal enterprise’ citing its inflated costs as major reason, opaque procurement processes whose sole objective was to benefit commercial interest and not public good. After a year of investigation, the senate select concluded and tabled report on Tuesday August 8th 2020.

“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 report notes.

The sneak peak overview of price disparities between this model and reality is as follows ,a pair of tonngs under MES is sh398,849 while market rate is sh4,989, instrument trolley under MES is sh1,419,517 while market rate sh800, washing basin per MES is sh1,302,935 while market rates is sh781 and lastly linen trolleys per MES figures is sh58,378 while market rate ranges between sh.5000 to sh.15,000

Megascope became the legal owner of the equipment effectively, putting the government at risk as the new contract made it clear that a claim could only be made against the subcontractor.
“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 report states.

Megascope healthcare limited owned by Kenya National chamber of commerce -KNCC and top campaign donor, Mr. Fred Ngatia is among the firms that landed the leasing deal. the firm emerged in the recent blistering expose by NTV investigative piece dubbed #CovidMillionaires that it was involved in reselling the billionaire Jack Ma donations that mysteriously disappeared in the airport.

In November 2019 to begin with, the Kenyan’s senators found out that the state was fleeced an extra of sh.4 billion in the now infamous medical equipment leasing scheme.

The Megascope ltd healthcare general manager, Renne Lupalo then cited maintenance, training, insurance, replacement of damaged equipment as some of reasons the costs seemed exaggerated According to the initial contract signed on February 2015, two years to the 2017 polls, the supply, delivery, installation, commissioning, maintenance and repair of the Lot 1 theatre equipment was for Sh4.6 billion government are exempted from incurring such costs.

However, in October 2017 as the country was locked in the battle for the repeat polls, Health ministry officials initiated a variation of the contract and expanded the project to include 17 additional hospitals spread across the country. The variation therefore saw the price jump to Sh5.4 billion.

The committee also noted contradictory information with regards to the quantities of equipment supplied and delivered to the various hospitals. For instance, in Garsen Health Centre, Tana River, records obtained from the MoH indicated that two operating theatre lamps and two operating theatre tables were supplied to the facility
“ 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.

Megascope ltd with its conspicuous nature did not miss out in multi-billion shillings supplies fiasco that has transition to scandal alongside Faram Eat Africa Ltd and other 7 companies received bulk tender to supply covid-19 materials running up to sh.500 million which the parliamentary committee on health headed by Muranga Women MP, Sabina Chege unearthed to be involved in tender irregularities and flouting of procurement laws forcing EACC and DCI to open investigations

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