The National Hospital Insurance Fund (NHIF) is facing a Ksh6.3 billion scandal after allegedly fraudulently awarding a Ksh6.3 billion contract to privately selected group of companies to manage group life and last expense for civil servants and the National Youth Service (NYS).
According to disclosures availed to this writer, the process to manipulate tenders at NHIF started with the recruitment process of the new CEO.
The first process was stepped on when the likely top candidate seemed not favorable to
The second interviews were held, with the current CEO Peter Kamunyu being appointed despite being an underdog.
Kamunyu is related to the current cabinet secretary for Health Mutahi Kagwe, the first reason it was easy for him to sail through.
The first move, according to inside sources, was to target non-kikuyu and Meru communities heading various departments.
“All of them were moved to NHIF far flank counties. The NHIF procurement manager called Wasike (Walubengo) and several others from Nyanza, Western and Rift Valley were all removed from key managerial positions and transferred immediately when they gave professional opinion contrary to NHIF chairperson and CEO to renew the multi-billion tenders without advertising. They transferred procurement officers who some are not even procurement specialist others don’t have the Kenya Institute of Supply Chain Management qualification to procurement office,” intimates our source.
It is intimated that NHIF had tried to irregularly award group life insurance tenders but reversed quickly, when the Kenya Medical Supplies Authority (KEMSA) scandal came to play.
The irregular awards roped in the NHIF board, the Insurance Regulatory Authority (IRA), officials from The Treasury and the Ministry of Health.
“The NHIF went further to calculate premiums on its own supported by IRA CEO Godfrey Kiptum to
excessively exaggerate the premiums from the past tender to Jubilee insurance at Ksh889 million
to Ksh6.33 billion yet the population is the same,” adds our source.
It is alleged that the management cooked figures to reflect fake Covid-19 risk and increased the cost six times the market value.
Pioneer Insurance Company, Britam Insurance Company, CIC Insurance Company, ABBAS and Sanlam that have been mentioned in the scandal, have been under investigation by the Senate over Teachers Service Commission (TSC) medical scheme, suspected to be fraudulent.
“The companies are said to benefit from the illegal process, a cut and paste formula borrowed from KEMSA where the agency was calling and awarding tenders as if it is personal business. This kind of price fixing and tendering is illegal, the law clearly states open tendering and competitiveness,” says an insider.
The CEO, Mr Kamunyu, is said to be pawn representing the interests of cartels in the Ministry of Health, IRA and the Treasury minting money through government tenders.
“It is important to note that IRA is supposed to act as the regulator and it is illegal for it to be part of procurement process that favors a particular group of companies over the rest,” adds our source.
“Kiptum has turned IRA into his money making machine. He pretended to block NHIF from previously procuring insurance services till when he was looped into benefiting from kickbacks from the insurance cartels.”
Behind the whole scheme are common names that have been identified where at least Ksh3 billion is to be channeled back through a certain agent called Maina, Zamara Insurance brokers and two other insurance agencies belonging to chairperson of NHIF Mr Lewis Nguyai and Treasury representative at NHIF by the name Mwaura Kamau.