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Youthful entrepreneurs’ dream of making Ksh32m in COVID beds ends in tears

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When Paul Wangaruro, Joseph Muhinja and Joseph Gathogo got an order to supply 500 hospital beds to the government in July, they were elated.

They borrowed Ksh3.5 million from a micro-finance institution in Githunguri town, Kiambu County- the location of their workshop- and got down to business.

At a price of Ksh65,000 for each Intensive Care Unit beds, they were to pocket Ksh32.5 million. It was good money for the under-employed trio of a dairy farmer-cum Masters degree student at University of Nairobi, an insurance man, and an engineering equipment supplier.

With the publicity buzz that surrounded the government order, they dreamt of going beyond hospital beds to manufacturing the full range of medical equipment under their company Broadmatt Limited.

Joseph Gathogo with one of the beds. Of all the county governments that promised to buy their beds, only Murang’a shows signs of promise. A deal for 100 beds is in the pipeline. PHOTO/FILE

“We saw a niche in the manufacture of hospital equipment like wheelchairs and drip stands as it is mostly imported,” Wangaruro is quoted by one local newspaper as saying.

The order for the 500 beds was triggered by a phone call from Andrew Wakahiu of the Presidential Delivery Unit. There was an anticipated need for hospital beds owing to COVID-19 pandemic.

After a crash course at the government’s Numerical Machining Complex, the trio had perfected their bed innovation and were ready for Kenya Bureau of Standards certification. They subsequently received the certification and began making the beds, often late into the night. All the while, they had no Local Purchase Order.

“We took the loan and made the order for materials after the county commissioner called to say that we could begin production with speed,” Wangaruro told the Sunday Standard.

Of the Ksh3.5m, Ksh650,000 went to training 65 youth from Githunguri area who were expected to assist in making the beds. The trio spent a further Ksh2m in importing castor wheels and the bed’s lifting mechanism from China. The Ksh2m was paid up-front, non-refundable.

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After breaking a sweat in the night workshop, the entrepreneurs now say the dream has turned into a nightmare. Everyone in the government who they used to communicate with went mute. Letters, phones calls, messages are all unanswered.

“Our efforts to reach Wakahiu have been futile. Even the county commissioner who was assigned as the manager never returned. The support the government promised was not forthcoming. We were not issued with the LPO,” says Wangaruro.

The ambitious trio engaged 65 local youth in the bed-making enterprise, on whom they spent Ksh650,000 in training. There was one problem though: The order for 500 beds from the government was viva voce. PHOTO/FILE

Meanwhile, the Ksh3.5m loan has since ballooned to Ksh5m. “The microfinance bank we borrowed from is now demanding its money, yet we don’t have it. The loan continues to accrue interest,” mourns Muhinja, 35. The trio reckons that total losses so far are about Ksh6.5m, considering the extra costs of running the workshop.

“At that time (of the order), Covid-19 was an emergency and the law would have allowed for direct procurement from local industries, but since the emergency is not there now, we have to go as per the Public Finance Management Act, which calls for a proper vendor process,” Wakahiu is quoted by the Standard as saying.

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