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Seven seas technologies whose tender of sh4.7 billion was cancelled days ago is now fighting back

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Seven Seas Technologies founder and CEO Michael Macharia
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The Seven Seas Technologies whose tender of sh4.7 billion was cancelled by the ministry of health last month is now fighting back by poking holes in the letter issued to him and by using his influence.

The Managed Equipment Service project is an ongoing initiative by the national government to equip selected hospitals in the counties with leased theatre, ICU, renal and radiology equipment, among other items.

Seven Seas Technologies was awarded the Ksh4.7 billion tender to connect all medical facilities above Level 4 hospital across the country with The Kenyatta National Hospital (KNH) “to help track patients seeking specialised treatment.” The KNH data centre was to be the pilot project.

The controversial tender was awarded when the country was on campaigns mode for repeat election back in October 2017. While others were on the streets, Michael Macharia who is said to be a well-connected man was busy in the corridors of power using his influence and powers that be to win this multibillion tender. Michael is said to be the brother of Cabinet Secretary for Transport, Infrastructure, Housing and Urban Development James Macharia. CS Macharia was the then boss at the ministry of health.

Firstly, Seven Seas Technologies is claiming that Health PS Susan Mochache’s letter did not make any reference to Attorney-General Kihara Kariuki who is by law the custodian of all government’s legal contracts.

Secondly, they are claiming that the government would lose over Sh20 billion in Foreign Direct Investments (FDI) for the five years the company was required to rollout the project.

Thirdly, SST is blaming the government through proxies for dismissing and terminating the only local company contracted under Managed Equipment Service(MES). Adding that it’s risky to give contract to a foreign company due to sensitive data that will be loaded in the HCIT System.

Michael Macharia in a sponsored article in one of the local papers is fully blaming the wheeler-dealers in government whom he claim are hell-bent on ensuring that a Chinese firm gets the tender in a move that could sound destructive to his company forgetting that his company, SST, also got the tender in a very questionable manner.

Yes, Seven Seas Technologies was the only local firm to have gotten a tender of that magnitude from the government but under what circumstances? Was this tender not influenced by others? We’re those not wheeler-dealers?

Macharia is arguing through proxy that the documents he submitted to Senate ad hoc committee last month confirmed his capacity to carry out the project, “Competition Authority of Kenya (CAK) had on June 26, 2019, approved Africa Healthcare Master Fund PTE Limited, a Japanese firm to invest Sh250 million in SevenSeas for the HCIT project.”

That “About Sh2.5 billion is to come from a Japanese fund, which is over and above the investment by Toyota, Abraaj, a Dutch Company and other private Kenyan individual investors.”

Realising that he is losing it, Macharia lied to the Senate ad hoc committee that his firm was at a crossroads since equipment worth over Sh250 million meant for the KNH data centre have not been cleared at the Port of Mombasa since January last year because the ministry had failed to keep their part of the bargain.

The truth

The SST firm is on the verge of collapsing, has no capacity to offset its burden through loan since it was blacklisted both locally and internationally by financial institutions for defaulting its financial obligations.

A source intimated that amidst all these, the Seven Seas Technologies is allegedly been struggling to offset a tax burden worth millions it owes the Kenya Revenue Authority.

According to sources, if it were not PR stunts as well as a fabricated financial report to woo investors on board, the company would have already collapsed. It is reported that at one time “Macharia falsely valued the company at Ksh3.2 billion, with him holding 35% stake.”

The cancellation of the tender

The government did not just cancel the tender but also blacklisted the company from doing business with the government for failing to implement the project.

“It is now apparent that despite attaining the high score of 20 out of 20 in the financial evaluation, your firm does not have the financial capacity to perform the HCIT contract and had been unable to mobilize any funding without GoK letter of support” Health PS Susan Mochache said in a letter dated November 18, 2019

“Implementation of the HCIT contract and execution of the project as envisaged is now stalled. Your firm has abandoned the site for more than 16 months. Essentially, this means that your firm has been unable to meet the agreed milestones on the implementation schedule.”

Macharia wanted to use his influence to have the Ministry of health to give him a copy of government support letter to allow him acquire monies from the bank to cover the project.

PS Mochache rejected this saying, “Stepping in to provide documents to assist the contractor meet its obligations would amount to the government securing financing for its own procurement” and that “it was not founded on the tender contract”.

“The requirement for an original copy of the support letter to be given to your firm does not feature anywhere in the tender documents, and it is overtly clear to the ministry that your firm lacks the requisite financial capacity to execute the HCIT contract,

“It will render the tender requirement that the successful tenderer be able to have adequate financial capacity for the contract irrelevant,

“It is overtly clear to the ministry that your firm lacks the requisite financial capacity to execute the HCIT contract and has been unable to mobilise any funding without a GoK Support Letter,” the letter reads in part.

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