Immigration department cancels controversial tourist insurance tender amid backlash

The Immigration Department has cancelled a highly debated multi-billion shilling tender for compulsory medical insurance aimed at foreign visitors to Kenya.

The decision follows protests from local insurers who accused the government of discrimination in the bidding process.

In a letter dated January 17, 2025, Immigration Principal Secretary Julius Bitok informed bidders that the tender for providing inbound health insurance cover, which had been floated on December 20, 2024, was being terminated.

The letter cited Section 63 of the Public Procurement and Asset Disposal Act, 2015, which allows for the cancellation of procurement processes under specific circumstances.

"This is to inform you that the above-mentioned tender for the provision of inbound health insurance cover services that were invited on December 20, 2024, and closed/opened on January 17, 2025, has been terminated pursuant to Section 63 of the Public Procurement and Asset Disposal Act, 2015," Bitok said in the letter.

"We appreciate your participation in the said tender and regret any inconvenience caused," reads further.

The tender had been a restricted one, meaning only insurers selected by the government were allowed to bid for the lucrative contract.

Insurers' outcry

The Immigration Department's move to limit the bidding process sparked an outcry from local insurers, who argued that the selection criteria lacked transparency and fairness.

Kenya's tourism sector has seen a significant rise in international visitors, with numbers growing by 35.4 per cent to reach 2.08 million in 2023.

This increase in visitors led the government to introduce compulsory medical insurance under the Social Health Insurance Act 2024.

The law mandates that all foreigners staying in Kenya for a short period must be covered by health insurance, alongside local residents who are also required to register for healthcare services.

The cancellation comes after a formal complaint by the Association of Kenya Insurers (AKI), which lobbied against the restricted tender.

Local insurers claimed that the Immigration Department had not revealed which companies had been invited to participate in the bidding process.

The Public Procurement Regulatory Authority (PPRA) also raised concerns about the legality of the tender, warning that it violated several procurement regulations.

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In a letter dated January 9, 2025, PPRA Director-General Patrick Wanjiku outlined concerns over the restricted tender process.

"It is our considered view that the subject tender cannot be progressed to its logical conclusion in its current form and you are therefore required to take due regard of our observations," Wanjiku wrote.

The PPRA questioned whether the conditions necessary for a restricted tender under the Public Procurement and Asset Disposal Act 2015 were met.

According to the Act, restricted tenders are meant to be used only when goods or services are highly specialized, or when the cost and time involved in evaluating a large number of tenders would be disproportionate to the value of the contract.