How Adani’s entry into the healthcare system increased by Sh56 billion

Letty Wambua, Anthony Linayara, Ryan Nyoto, Jeremiah Momo, Michael Tuita and Catherine Kimera represented the Ministry of Health. Mr Mangania and Felix Rapp sat at the end of the negotiating table with Safaricom. Cliff Otega, a member of President William Ruto’s Council of Economic Advisers, and independent contractor Daniel Maywe also attended the meetings.

After an apparently fruitful end to the engagement, Safaricom agreed to make concessions on some aspects of a unified system aimed at the government’s Universal Health Care Coverage (UHC) plan. For example, it agreed to reduce the cost of providing a drug use review system from $2.7 billion to $312 million.

The government will be billed 3.4 billion for primary health care and hospital management information systems, down from 9 billion. In total, Safaricom must provide the integrated system and implement it over 10 years for $48.3 billion, including taxes and project costs.

“After discussing all areas of concern, the committee reminded the bidder (Safaricom) that the quality of service (communication, infrastructure and end-user equipment) should not be compromised and that the specifications should remain as per the tender document. Be.”

“The tenderer was therefore requested to submit a revised financial proposal based on the negotiations. The total cost proposed for this engagement was Ksh 48,367,839,050 inclusive of all taxes and financing cost for a period of 10 years,” the The minutes of the meeting were read in part by the Daily Nation.

Documents filed in court on September 30 by Busia Senator Okia Omtah now show that along the way, the Ministry of Health and Safaricom ignored initial proposals, discussions and letters before going back to the drawing board. The effect of the new start was to increase the cost of the project to 56.5 billion dollars, a cost that would eventually be paid by the taxpayer in a profitable deal, despite the complicated structure of documents.

Mr Umtah’s court documents further show that Safaricom and its partners – Apeiro Ltd and Konvergenz Network Solutions – proposed that the Ministry of Health raise money to pay them by imposing a service charge on all transactions related to the UHC plan. do SHIF members, hospitals claiming after treatment of patients and other related service matters will absorb service charges to fund the project, if the proposal is accepted. Safaricom did not respond to our emails and follow-up requests on the phone, with its communications teams seeking clarification on project costs. The telco is yet to respond to the appendices filed in the court.

If the Ministry of Health accepts the proposal, it could raise all members of the Social Health Insurance Fund (SHIF) to a little over 2.75 percent of their gross income. Safaricom Consortium, in its projections, says if the government imposes a five percent service fee, which it describes as the best-case scenario, the project will see its members add an additional $141.4 billion, which could Used to solve sums. expenses

The projections also indicate a “highly likely” rate of 2.5 per cent that SHIF contributors will raise Sh111.09 billion through service charges. The “worst case” scenario proposed by Safaricom lists a rate of 1.25 percent, which it says will raise at least Sh63.2 billion. If the service is charged, or the government health agency pays the consortium from their coffers, the source is the same: Kenya.

“For sustainability, the Consortium proposes to the Ministry of Public Health that SHA members’ contributions, claims from health facilities and costs (service fees) for tracking and tracing solutions to fund payments due to the Consortium. “Expected revenue from surcharges on member contributions, claims and tracking solutions is estimated at $111 billion over 10 years, depending on the amount of the surcharge,” Safaricom said. Consortium states proposal.

Within minutes of everyone saying “Amen” to Mr Mangania’s prayer on January 24, the Medical Services PS Harry Committee sent a letter to the Safaricom chairman stating that the Ministry of Health intends to award the contract to Kenya’s largest telco. .

A notice of intent to award by the Ministry of Foreign Affairs for Medical Services indicated that if no issues are raised by Safaricom within the next 10 days, the contract will be sealed and an agreement will be signed.

And then everything went quiet, until September 21 – nine days before the government mandated registration for all Kenyans for SHIF, which succeeded the National Health Insurance Fund. After discussions on social media, Safaricom released a statement indicating that it will invest in the healthcare industry in partnership with the government. It said it was part of a consortium with United Arab Emirates’ Apero Ltd and Kenya’s Convergence Network Solutions.

Apeiro Limited, the largest shareholder in the Safaricom consortium, has business ties with the Adani Group, the Indian company that has sparked controversy in receiving lucrative bids in Kenya. The Abu Dhabi company holds a 59.55 percent stake in the consortium, Safaricom owns 22.56 percent, while Convergence Network Solutions Ltd holds a 17.89 percent stake.

Apero is a subsidiary of Abu Dhabi-based investment company Sirius International Holdings. Sirius itself is a subsidiary of International Holdings Ltd., creating a web of companies that make it difficult to track beneficial owners.

Adani Group’s latest Jussie company in Kenya is a Sh95.68 billion ($736 million) contract it won last week to build and operate four power transmission lines and two substations for 30 years before being handed over to Kenya. did The Indian conglomerate is also in talks for another controversial deal that is the subject of court and parliamentary investigations – a $2 million (Sh258 billion) deal to operate Jomo Kenyatta International Airport for 30 years.

In IHTS, the Safaricom consortium is investing $104.8 billion over the decade which will be repaid in monthly installments from February 2024. Public health professionals across the country, project management and on-the-ground roles from various technology components across the country. The delivery of this project builds on Safaricom’s ability to successfully develop digital platforms that have a positive impact on the distribution of social support funds to the elderly in Kenya through the Hustler Fund, the Surrey e-voucher program and the Inua Jamii program. . Mr Nigwa said in the statement.

The details of the works to be carried out by the Safaricom consortium bore an uncanny resemblance to those it had previously bid for, and the bid was for $48.3 billion.

Apart from the obvious fact that the tender number MOH/SDMS/ADM/SPP/005/2023-2024 was the same in both proposals sent by Safaricom, many of the software and infrastructure items listed were also the same. Besides, the prices of some items have now been raised, almost seven times what Safaricom had initially bid for.

The Healthcloud data centers, which Safaricom had tagged at 780 million at the time of the bid, will now cost 5.097 billion dollars.

Security and support solutions, which were capped at $943.2 million in Safaricom’s solo bid, will now cost $5.2 billion.

The drug use system, which was reduced to $312 million in negotiations between the ministry and Safaricom in January, will now cost $2.4 billion. And the trend was similar to at least 12 other services listed in both proposals. The 15 services seen by the Daily Nation in both proposals showed that the consortium’s proposal increased their cost by $29.1 billion. This means that the cost increase accounts for 27.8 per cent or almost a third of the new Sh104.8 bid.

Medical Services PS Harry Committee said in an interview with this Daily Nation As the scope of the project was expanded, therefore the cost increased significantly. “Because we have to bring in other government agencies that are part of the health industry. For example, specifically let me say PPB, and therefore, we need to install track and trace. That means we have to We support this organization [in] Digitizing their systems for all drugs that are locally produced or imported, so for that, we need to have what is called track and trace,” said Dr. Committee. “We need to know that Where the drugs are produced, and the quality of these drugs and the Kenyans who consume them should find any challenges in terms of quality and production. in case [of anything]It can be stopped and undone at any stage.”

Dr. Committee also cited the creation of registries to register patients, health professionals and facilities as part of the cost increase. However, minutes of talks with Safaricom in January show that registries were already part of the plan, as was integration with all stakeholders in the healthcare sector.

With both proposals, the Ministry of Health issued notices of intent to award the contract within hours. In the second proposal, the notification was issued less than 24 hours after the consortium submitted its technical and financial proposal to the ministry.