Moi University strikes deal with hospital on paying Sh168m debt

Financially crippled Moi University has agreed to pay Sh168 million to a top private hospital in Eldoret for medical services rendered to its staff and their spouses.

In a deal with Mediheal Group signed before Justice Eric Ogola of the Eldoret High Court, the university committed to pay Sh2 million every month until the debt is cleared.

The hospital, owned by former Kesses MP Swarup Mishra, sued two years ago after the university defaulted on payments.

Court documents show the university reached an arrangement with the hospital 10 years ago for its staff and spouses to be treated there.

Lawyer Aloo Romana represented the hospital in the suit while lawyer Eric Liyali represented the public university.

Mr Liyali told the court the university would abide by the agreement to pay the pending bills estimated at Sh168 million.

Mr Romana had argued that the university had failed to clear the bill despite several reminders.

But Justice Ogola said the hospital could come back to court if the university defaulted on its agreement to settle the debt.

In September 2021, administrators admitted that the university was in a financial crisis after the Auditor-General revealed that it was technically bankrupt.

Auditor-General Nancy Gathungu said in a report for the 2018-2019 fiscal year that the university's debts had exceeded Sh4.5 billion.

A year ago, university council chairperson Humphrey Njuguna said debts had accrued to more than Sh5 billion, hampering operations.

The university attributed its financial woes to the closure of satellite campuses and the scrapping of some courses three years ago.

The council has embraced a plan intended to prevent the university from collapsing.

Dr Njuguna said administrators would expand its sources of income to stay afloat.

In June last year, the university began cultivating apples on its 100-acre farm, targeting the booming market for the fruit.

The project is expected to be expanded to another 1,000 idle acres of the university’s land.

The council also attributed the university’s financial woes to a bloated workforce and declining student enrolment.

The university has 30,000 students, down from 50,000 a few years ago.

The Ethics and Anti-Corruption Commission (EACC) is investigating allegations that the university paid salaries to ghost workers.

The EACC demanded payroll records for all staff from July 1, 2018.

The university is said to have at least 10,000 workers, with 1,000 of those on the payroll alleged to be ghost workers.

Some workers have accused the university of delaying their salaries for months, claiming they had been blacklisted by credit agencies for defaulting on loans.

Vice-Chancellor Prof Isaac Kosgey has said he is optimistic the university will bounce back to profitability, saying the challenges are “manageable”.

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