EACC Asked to Investigate Nairobi Hospital As Corruption, Diversion of Funds Allegations Rock Facility

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Allegations of mismanagement, bribe-taking, and multiple underhand dealings by top officials at the Nairobi Hospital are wreaking havoc on members of the facility’s staff morale and productivity.

According to sources at the hospital, a get-rich-quick cartel within the Nairobi Hospital, in cohort with some of the managers have conpsired to not only divert hospital funds but also, award tenders to friendly individuals who are working as proxies in fleecing the hospital’s resources.

Those fingered include current chairman of the hospital’s board Dr. Chris Bichage who the sources reveal has entered into an unholy alliance with the CEO James Nyamongo, Company Secretary Gilbert Nyamweya, Dr. Barcley Onyambu, Dr. Fred Kambuni, Dr. Meshack Ong’uti (not a board member) and other board members to the chagrin of other stakeholders.

Mr. Nyamongo is said to have left Kenya Pipeline Company (KPC) before joining the Nairobi hospital under very unclear circumstances due to fraudulent activities. He was also bundled out of office barely a week after being appointed the interim CEO at the National Oil Corporation of Kenya in 2019.

Dr. Bichage is a former MP for Nyaribari Chache and is no stranger to corruption allegations. In 2017, he was charged (read here) in a Kitale court with defrauding Advocate of the High Court David Biketi KSh 11.1 million by pretending he could sell him 10 acres of land in Trans Nzoia County. Dr. Bichage is said to have committed the offense between August 7, 2015 and March 11, 2016.

“The Nairobi hospital, being a top class hospital in the East and Central Africa region, is expected to have in place strong and robust corporate governance structures to govern and manage the institution both at the board and management levels,” said a senior manager, who requested to remain anonymous.

However, the reality on the ground and practice in the institution is in total contrast to the expectation.
The latest controversy which should interest the Ethics and Anti-corruption Commission (EACC) is the billion-shillings tender to supply, implement, maintain and support a Hospital Management Information System (HMIS) and Enterprise Resource Planning (ERP).

In April 2022, the hospital advertised in the local dailies for a consultancy for the supply, implementation, maintenance and support of HMIS and ERP. After a thorough procurement process was undertaken, including due diligence and site visits, a Joint Venture (JV) of two companies; GoodX Enterprises(PTY) Limited, a South African company and DynamicNav Systems Limited, a Kenyan company, won the tender.

The winning JV was awarded the contract in June 2023 at a contract sum of USD 5,643,334 (approximately Kes. 960 million) for a period of five (5) years, and the contract was signed in August 2023. The JV fulfilled all the required conditions as per the contract, including submitting a Performance Bank Guarantee of 5% of contract value (USD 282,167) within the time specified by the hospital.

The JV, which was referred to as “System Integrator” in the contract, immediately commenced the execution of its mandate in the project according to the work plan approved and in agreement with the hospital Project Implementation Team (PIT) requirements. The System Integrator was given an office in the hospital equipped with WiFi, a printer and a shredder.

In addition, the System Integrator was given parking and identification badges to enable its staff access various parts of the hospital in the course of carrying out their work. The contract was signed when Dr. Irungu Ndirangu was the chairman of the Nairobi Hospital board.

However, when the Kenya Hospital Association (KHA) conducted the Annual General Meeting (AGM) in September 2023, there was a change in the board of directors including the replacement of the chairperson Dr. Ndirangu by Dr. Chris Bichage.

Immediately after Dr. Bichage took over, the System Integrator started to experience hostility, interference, resistance, non-communication, and sabotage from the new board and management. There were allegations from the current chairman, CEO, and a section of the new board that the System Integrator had failed to meet the required conditions in the contract, which they (Dr. Bichage and CEO James Nyamongo) had signed.

To the surprise of the System Integrator, the board members who were making the allegations were from the same tribe as the hospital’s chairperson, chief executive officer, and the company secretary, supported by other board members who had been compromised.

They claimed that the System Integrator failed to submit a Performance Bank Guarantee as specified in the contract. The guarantee was indeed sent to the hospital, addressed to the CEO. The bank attempted severally to contact the CEO but he declined to collect the original copy from ABSA Kenya Limited, Trade Finance Department, Bishops Gate, which is a walking distance from the hospital.

The System Integrator made the effort to collect the original Performance Bank Guarantee from the bank and delivered it to the CEO’s office. Unfortunately, the CEO instructed the secretary not to accept its delivery. Eventually, the System Integrator sent a copy to the CEO via email. In October 2023, the System Integrator submitted to the Nairobi hospital an invoice of USD 1,594,948 for the services already rendered from the date of signing of the contract.

The hospital however declined to acknowledge receipt nor honor the invoice. The System Integrator has now come to find out that after the September 2023 AGM, a section of the new board is out to cancel the contract and give it to a company called ICT Health, which had competed in the previous tender but was technically knocked out.

This company is allied to James Nyamongo, the CEO, who is past retirement age.

Nyamongo’s contract expired in December 2023, but was renewed under mysterious circumstances against the Nairobi hospital’s human resource code of regulations, to fulfil his personal interest in the HMIS-ERP contract. On the other hand, Nyamongo and section of board members are happy to maintain the status quo with the current hospital’s ICT system, which has serious financial leakages for whatever reasons known to them.

Furthermore, it is alleged that the CEO has never gone on leave for the last three (3) years when in office, which raises many questions about the corporate governance levels of the Nairobi hospital.

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