COVID-19 Crisis

Under flak for irregularities, govt scraps huge medical procurement deal

Published On: April 2, 2020 06:05 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 2: Amid widespread criticism, the Ministry of Health and Population has scrapped a controversial procurement deal that it had signed with the Omni Group for supplying essential medical equipment needed for containing any spread of the COVID-19 in Nepal.

The ministry has also decided to seize a surety deposit of Rs 50 million by way of a fine for the failure of the business firm to deliver the medical equipment within the given time frame.

The government has been under public scrutiny in the past few days after it emerged that it was paying for the medical supplies at rates three times higher than what some other suppliers had offered. Pressure mounted on officials concerned to come clean over the deal which was clinched without any competitive bidding.

Concern over the faulty procurement procedures prompted Prime Minister KP Oli himself to grill the officials including Health Minister Bhanu Bhakta Dhakal. The officials said they had allowed a 20 percent mark up over the usual market price on condition that Omni Group would deliver the procurement at the earliest date possible.

Procurement documents obtained show that the government paid over Rs 15,000 for a set of PPE (or personnel protection equipment) which the Chaudhary Foundation was able to buy for around Rs 3,000. Similarly, N-95 masks, for which the Ministry of Health and Population had earlier cancelled a procurement after private parties made a price offer of Rs 400, were purchased this time for nearly Rs 900. Likewise, the infrared thermometer, which the ministry earlier procured at the rate of Rs 2000, were purchased at Rs 10,000 each. Most of the medical equipment that the ministry agreed to procure from Omni is found to have been priced exorbitantly higher than market rate.

Medical suppliers in Nepal cried foul after the procurement contract was awarded to one particular company while turning down competitive price quotations. A Nepali businessman based in the Chinese city of Guanzhou took to social media, pointing out that the prices paid to Omni Business Corporate International Private Limited, to give the business entity its full name, were grossly inflated.

At Wednesday's regular press briefing, Director General at the Department of Health Service, Mahendra Bahadur Shrestha, said he has scrapped the agreement with Omni and also fined it for breach of deadline. The business group was to have delivered all the medical supplies in Kathmandu by Thursday.

According to Shrestha, the firm was able to import only 10 percent of the total medical equipment covered by the agreement. He accused the company of being non-committal as to when the equipment would reach Kathmandu.

Shrestha announced that a fresh bid would be called soon for supplying the essential medical equipment. He urged the public not to panic, arguing there was now enough equipment on hand to deal with the COVID-19 crisis for now.

“Another bid will be initiated from tomorrow. We will give a three-day deadline to suppliers to come up with their proposals,” said Shrestha.

Insisting that all the equipment will be arranged within five days after selecting a new bid, Shrestha urged medical professionals and health institutions to continue screening for suspected cases of the new coronavirus and offering treatment.

Omni Group was awarded the procurement deal worth over Rs 1 billion without any competitive bidding, citing special circumstances. The ministry had scrapped the bidding that it had opened two months earlier.

Meanwhile, the ministry has instructed medical establishments not to use the 75,000 Rapid Diagnostic Kits that it had procured from China. The ministry said the kits are now being tested at the National Health Research Council and will be brought into use only after the council gives its go ahead.

Diagnostic kits worth $600,000 are now lying useless while doctors are demanding that the hospitals have this vital piece of equipment. Director General Shrestha, however, dismissed any sense of urgency, saying the kits should be resorted to only when the country starts seeing transmissions of the new coronavirus within the community.

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