PAC finds several lapses in procurement of COVID-19 material during second wave

A file photo of ventilators and beds at the COVID-19 Care Centre (CCC) at BGS Hospital, off Uttarahalli-Kengeri road, in Bengaluru.   | Photo Credit: K. MURALI KUMAR

The State Legislature’s Public Accounts Committee (PAC) has identified several lapses in the tendering process and procurement of COVID-19 material, including Rapid Antigen Test (RAT) kits, during the second wave by the Health and Family Welfare Department, resulting in additional expenditure worth many crores.

Not satisfied with the reply by the department to their queries, the committee, which met here on Tuesday, sought a detailed explanation by next week. The committee, which took up issues pertaining to procurement of 3-part and 5-part haematology cell counters (haematology analysers), RAT kits and shortage of ventilators and oxygen during the second wave, found that officials had not furnished complete and correct information. “The committee has found that the department is trying to cover up its lapses,” PAC chairman Ramalinga Reddy told The Hindu on Wednesday.

Excess payment

Mr. Reddy said there was prima facie evidence that the department had spent ₹3.79 crore in excess to procure 30 lakh RAT kits in April. “The cost of each RAT kit, which ranged between ₹33.35 and ₹35.80 when quotations were invited for the first time on April 6, 2021, escalated by nearly two-and-a-half times in a fortnight ranging between ₹81.64 and ₹134.40 on April 25 when the quotations were invited for the second time,” he said.

According to the proceedings of the PAC meeting, the company with whom the Health Department had initially placed an order for six lakh RAT kits was able to supply only three lakh within the stipulated time. Following this, the department invited quotations for the second time.

“However, instead of blacklisting this company (for not delivering the order on time), the department allowed it to again participate in the tenders for the second time. Moreover, the committee found that all the participants of the first tender had again participated in the second tender too. The only difference was they quoted higher rates. How can this be allowed?,” according to the proceedings.

Differential rates

“What is more intriguing is the fact that the same lowest bidder (L1), who delivered Karnataka’s order at ₹ 81.64 per kit, has supplied the same kits at ₹69 per kit to the Uttar Pradesh government. Why the differential rates? Why did the department allow?” Mr. Reddy asked.

With regard to procurement of haematology cell counters, the PAC has found that Karnataka has spent an excess of ₹25 crore in the procurement of 1,195 three-part haematology cell counters. “While Karnataka paid ₹2,96,180 per unit, Himachal Pradesh government has purchased the same equipment at ₹1,30,000 per unit,” the PAC chairman said. Also, the State spent an excess of ₹6.18 crore in the procurement of 165 5-part haematology cell counters. While Karnataka paid ₹8,35,000 per unit, the Kerala bought the same equipment at ₹4,60,200 per unit, he said.

The PAC, in August 2020, had directed the Comptroller and Auditor General (CAG) to conduct a special audit into the purchase of COVID-19 equipment during the first wave.

The then PAC chairman H.K. Patil had instructed the CAG to constitute a special team of its employees to get the audit of all purchases of COVID-19 equipment.


This was following allegations that the government had siphoned funds by purchasing inferior quality of PPE kits, sanitisers, ventilators, masks, and other equipment related to COVID-19 at prices higher than prevailing in the market.

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Printable version | Oct 23, 2021 10:53:58 PM | https://www.thehindu.com/news/national/karnataka/pac-finds-several-lapses-in-procurement-of-covid-19-material-during-second-wave/article35989068.ece

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