The four days between May 9 and May 13, 2024 must have been very busy for top executives at Safaricom Limited, technology experts, accountants, strategists, designers, copy writers, international brokers plus lawyers based in Nairobi, Abu Dhabi and London.
Safaricom had on May 9 been given just 24 hours by the Ministry of Health to decide whether it was interested in creating the Integrated Healthcare Information Technology System (IHTS) necessary for the roll out of the Universal Health Care project (UHC) and the Social Health Insurance Fund (SHIF).
After being awarded the same tender for Sh48 billion through single sourcing in January before there was a change of heart along the way, everyone who was involved could not let this mouthwatering deal slip away for a second time. So its executives and lawyers got working.
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By May 13 and in a record four days, three confidential gigantic documents in terms of pagination which we have obtained that now form the blue print of what is the entire SHIF system had been generated.
The first is a 745-page colorful technical proposal detailing how the Integrated Healthcare Information Technology System (IHITS) was going to be created by a consortium of three companies; Safaricom, Konvergenz Solutions ltd and Abu Dhabi based company Apeiro.
The second was an 18-page consortium agreement drawn by law firm Kaplan and Straton detailing how Safaricom, Konvergenz and Apeiro were going to work together in order to deliver the mega technology project.
The third document was a financial proposal detailing how the consortium partners will spend money of various components of the monumental project and how they intend to recoup Sh104 billion through surcharge fees by Social Health Authority (SHA) member contributions, claims and insurance tracking.
Things were clearly moving at break neck speed and with very high efficiency.
The government had among its many unfulfilled promises made during the 2022 election campaigns pledged to overhaul the 58-year-old national health care scheme by making it universal. Two years had since passed and nothing had happened to change the health sector.
Additionally opposition towards the Finance Bill had already begun on social media by Kenyans angered by the high cost of living and unfulfilled election promises which culminated into deadly protests where parliament was breached the following month.
So the pressure to deliver SHIF was on.
“We, the undersigned, offer to provide the consulting services provision of Integrated Healthcare Information technology system for universal health care (UHC) for the Republic of Kenya accordance with your RFP dated May 9, 2024 and our Proposal,” the Safaricom wrote on behalf of the consortium to the Ministry of Health (MOH) on May 13.
Scroll to read entire SHIF Contract signed between the government and the Safaricom Consortium
“We are submitting our proposal with the following firms as consortium partners; Konvergenz Network Solutions and Apeiro limited with Safaricom PLC being the lead bidder,” said Safaricom.
Apart from the fact that the consortium members had managed to produce such detailed proposals while coming up with legal agreements between themselves at such a break neck speed nothing else seemed out of the ordinary at this point.
A thorough perusal of the proposals, approvals by government and investigations into Apeiro’s profile, its ownership which is hidden in layers in Nairobi, Abu Dhabi and London plus the business dealings of its owners raises a lot of questions about the whole deal all together.
The first red flag was the short period of just a day which MOH had given Safaricom to respond to the Request for Proposal (RFP) despite the enormity of the project.
According to the Public Procurement and Asset Disposal Act, bidders must be given a period of 14 days to either purchase a tender document or download it and apply. MOH however gave Safaricom just a day to decide whether it would apply for the tender and then three days to come up with a technical and financial proposal.
And even despite breaking procurement laws on mandatory time which should be given to bidders, MOH overlooked its own requirement by allowing the Safaricom Consortium to respond to its RFP three days past its own set deadline on May 13.
This is not withstanding the fact that the consortium managed to write a technical proposal on how their proposed Integrated Healthcare Information Technology System (IHTS) would be rolled out in all the 6,535 medical facilities in the country.
This was done without indicating whether all the facilities had been visited within four days in order to ascertain their technological, infrastructure and personnel needs in order to come up with the Sh104 billion budget.
Nevertheless, a perusal of the technical proposal submitted by the consortium and a study of the RFP sent by MOH as a guideline for filling the tender shows some glaring requirements which were not filled or met by some of the members of the consortium.
The Royal connection
In an affidavit that is now before court signed by Busia Senator Okiyah Omtatah, Safaricom for instance failed to sign the Technical Proposal Submission form despite being the consortium leader. The form is on page six of the submitted tender document and was filled by Boniface Mungania who forgot to sign.
Mungania also forgot to sign the Tender Securing Declaration Form on page 700, Self Declaration and Commitment to Code of Ethics (page 687) and a declaration that Safaricom will not engage in corruption. On the contrary, Konvergenz and Apeiro signed all the three declarations.
According to Omtatah, Safaricom also listed four senior staff who had already left the company in a the ‘Power of Attorney’ document which was required for the tender.
A power of attorney (POA) is an instrument signed under seal by a company authorizing certain personnel to act on its behalf. Konvergenz and Apeiro issued Power of Attorney documents signed on May 13. Konvergenz selected Abdullah Abdi Sheikh to act on its behalf for the tender while Apeiro on the other hand selected Safaricom’s Boniface Mungania to act on its behalf.
Safaricom listed its CEO Peter Ndegwa, Dilpal Pal, Stephen Chege, Joseph Ogutu, Sylvia Mulinge, Sitoyo Lopokoiyit, Nicholas Mulila, Paul Kasimu, Morten Bangsgaard, Chris Senanu and Nicholas Kamunyu as those authorized to act on behalf of the company.
Chege, Ogutu, Mulinge and Senanu have since left the company despite being listed on the sealed ‘Power of Attorney’ that Safaricom presented in the tender document. The company’s CEO then appointed Boniface Mungania to act on behalf of Safaricom using an unsealed letter.
“I formally authorize the person whose details are set out below to sign the bid documents and participate in negotiations during the tender process on behalf of Safaricom PLC (the lead bidder for the project),” Safaricom CEO Peter Ngegwa said in a letter attached to the tender on May 14.
Aside from the errors above, MOH made it a requirement by all bidders in the consortium to demonstrate their experience in carrying out an assignment as huge as the proposed Integrated Healthcare Information Technology System (IHTS) over the last 10 years.
This rule also required the bidders to demonstrate similar experience in Kenya together or globally by inserting copies of the contracts they had done, purchase orders, service orders and performance certificates.
“Bidder should to insert here copies of the form of contract, purchase order, service order, and performance certificate or similar evidence of similar assignments carried out by the firm,” said one of the bidding rules by MOH.
While Safaricom and Konvergenz were able to demonstrate their work experience, Apeiro which was less than a year old since its incorporation in the Abu Dhabi did not.
Infact from our own investigation we have established that Apeiro was incorporated by the Abu Dhabi Gold Registration Authority on July 10, 2023 using registration number 000010318.
While Apeiro from its registration data may appear like a small inexperienced company that somehow managed to bag a multibillion health contract, a deeper dive into its ownership raises more questions than answers.
Infact, from our investigations, Apeiro is not an ordinary company. What it lacks in terms of technical experience in delivering a project as huge as SHIF, it has in the necessary global networks and power that runs all the way to the royal family that has ruled the United Arab Emirates since 1883.
In its submissions to the tender committee at the Ministry of Health, Apeiro said it is owned 100 percent by Sirius International Holding ltd.
Beyond its affiliation to Sirius International, Apeiro’s ownership is so complex that it is nearly impossible to the naked eye to discover who its real owners are.
Yet when we dug, we found out that Sirius is owned 83 percent by Tamouh Healthcare Group and Sampi International Holding (16 percent). Tamouh is owned 99 percent by IHC Healthcare Holding which is in turn owned 99 percent by IHC Management LLC.
At the top of the complex ownership structure is the International Holding Company (IHC), a firm formed in 1998 as part of UAE’s vision 2030 which aims to achieve the goal of increased diversification economically, socially, and culturally.
IHC is majority owned by The Royal Company, a conglomerate of firms that are part of Sheikh Tahnoon bin Zayed al-Nahyan’s business empire. Tahnoon is the deputy ruler of Abu Dhabi, capital city of the UAE. His brother Khaled bin Mohamed bin Zayed Al Nahyan is the UAE ruler.
Friend or foe?
Depending on who you ask, the UAE is either a friend or foe to Kenya. In May 2024, just around the same time when Apeiro was brought into the SHIF picture, President William Ruto referred to the UAE as “friends of Kenya” after they gave him a private aircraft to use for a State Visit to the US.
State House Spokesman Hussein Mohamed even explained that the ‘kind’ gesture by the UAE had cost Kenya just Sh10 million instead of the Sh200 million it would normally cost if Ruto had hired the same aircraft at market rate.
Political analysts at that time however raised eyebrows saying that the plane did not come for free and there must have been something given in return.
“The UAE are opportunists in this case, but it shows how vulnerable Kenya, and Ruto is in particular, is. But the question is, what did they get in return so that they could donate a jet as though it was petty cash?” posed Macharia Munene, prof of History and International relations at the United States International University (USIU) Africa.
While the explanation by government at that time did not raise any eye brows, when you look at the timing when the free aircraft was provided to Kenya by the entry of Apeiro into the SHIF contract, the lines now become clearer.
Yet, what is raising even more questions is the fact that Apeiro might have been given a through pass into the SHIF contract because they failed in so many areas in the technical proposal given to MOH by the Safaricom consortium which is in our possession.
Like for instance, Apeiro which on the deal was awarded a massive 59.55 percent of the scope of work to be carried out in the joint venture when the contract was eventually signed three months later on August 9 did not attach its three-year certified financial records, CVs and academic certificates of its key personnel.
“Bidders should provide detailed CV’s and professional certificates which must be attached for review by the evaluation team. They must be relevant degrees (Business, Legal etc) plus certification,” said another rule of the tender.
The Abu Dhabi company also did not declare how much in terms of business it was capable of handling financially in the confidential business questionnaire while Safaricom and Konvergenz indicated they could handle over Sh1 billion and Sh250 million respectively.
Interestingly, instead of proving its experience in handling the contract, Apeiro said it was bringing “together a consortium of experienced and capable partners to implement the project.”
In short, while Apeiro could not demonstrate it had the required technical experience, enough financial muscle and personnel to carry out the project it said it would create another consortium of14 companies within the Safaricom Consortium to do its roles which constitute a whopping 59.55 percent of the tender.
Among the companies that Apeiro claimed it had brought together to implement the project include Canadian integrated health solutions company IQVIA who were to distribute and manage the smart Primary Care Network (PCN) across the country.
Apeiro also declared it was bringing on board Oxinus Holdings to implement the ‘Beneficiary registration module.’ IGA Metavalue was to create and manage payment reconciliation systems while Mu Sigma, the world’s largest pure-play analytics and decision science service provider was to create and run the Drugs Utilization Review Systems (DUR).
Apart from the four companies Apeiro also declared it would bring on board health insurance management company IQVIA HIM to handle Electronic Claims Management, British firm Kirontech to handle fraud in the system and PharmaSecure, a global serialization, track-and-trace company to ensure compliance, coverage, and mitigate risk.
Additionally, Apeiro declared it would bring on board other global companies such as Dawatech, Track Four Infotech, IQVIA Ordergenie, Medblaze and Aleria.
All these companies were supposed to handle a bulk of the work in the tender which was handed over to Apeiro according to a consortium agreement between the company, Safaricom and Konvergenz.
Yet despite the enormity of the stakes involved in overhauling the entire digital health system and public medical insurance, Apeiro did not demonstrate in the tender any collaboration of similar work which it had carried out with any of the 14 companies as required in the tender rules.
“You should list only those assignments for which the bidder was legally contracted by the procuring entity as a company or was one of the joint venture partners. Assignments completed by the bidder’s individual experts working privately or through other consulting firms cannot be claimed as the relevant experience,” said one of the rules of the tender.
Apeiro instead attached recommendation letters supposedly given to the companies it was proposing to bring to the consortium for various works carried out across the world. This included contracts with Bill and Melinda Gates Foundation, Global Affairs Canada and USAID.
Additonally, Apeiro also produced a letter of comfort from another Emirati company Sirius. In the world of contracts, a letter of comfort is a written document that provides assurance that an obligation will be met.
“Pursuant to clause 2.2.2. of the project consortium agreement and as part of the conditions precedent therein, Apiero is required to provide a letter of comfort issued by Sirius International Holding Limited to Safaricom and Konvergenz. Apeiro is currently controlled by Sirius,” said the letter signed by Ajah Hans Raj and sent to the Safaricom Led Consortium.
“Apeiro intend to novate its rights and obligations under the project contract and the project consortium agreement to a newly incorporated subsidiary of Apeiro incorporated in Kenya,” said the letter.
Details from the Registrar of Companies however indicate that Apeiro Limited (Kenya) whose shareholders do not include the Abu Dhabi based Apeiro was registered on July 5, just a month before MOH awarded the tender to the Safaricom led consortium.
Yet with all these shortcomings by Apeiro, MOH ignored all these red flags and proceeded to award the tender to the Safaricom Consortium on August 9 paving way for its chaotic implementation.
So far the system has failed to deliver and another company has been brought in to save the situation.
Early this month, Safaricom and its consortium partners engaged a new firm to address a critical issue with the claims portal of the Social Health Authority (SHA) system. Savannah Informatics was brought in to manage the portal responsible for processing claims submitted by private healthcare facilities.
Initially, the responsibility for the e-claims portal had been assigned to Apeiro Ltd which was awarded over half of the contract despite providing zero evidence of its capability to carry out such a critical and huge contract.
In the next installment of SHIF chaos: Unpacking everything that the Safaricom Consortium promised to to deliver vs what is on the ground. Plus how a loophole allowed Apeiro to receive billions of taxpayers’ money while other firms perform its obligations and how expertriates are earning up to Sh6 million a month to run a system that has so far failed to deliver
Meanwhile it has taken alot of good will from people across the world to get access to such classified information that is of public interest so if you have an anonymous tip about SHIF send it to [email protected]
