The State Health Department has justified the purchase of PPE kits, sanitisers and IV fluids by the Karnataka State Drugs Logistics and Warehousing Society (KSDLWS) at costs higher than the current market rates, arguing that the rates are “dynamic” during a pandemic.

Moreover, the quality of the material also matters, the department’s Additional Chief Secretary said in a report submitted to the State Legislature’s Public Accounts Committee (PAC) on July 7.

Based on a complaint by the Karnataka Rashtra Samiti to PAC about the alleged irregularities in procurement of medical equipment including PPE kits, sanitisers, IV fluids, and other COVID-19 materials, the PAC had posed seven questions to the Health Department asking it to submit a detailed explanation.

Responding to PAC point by point, the Health Department said the demand for PPE kits was huge in March while the number of domestic manufacturers were few. “Also, as the KSDLWS did not have any prior experience in procuring PPE kits, orders were placed with firms approved by the Centre. Although 3.5 lakh PPE kits were ordered at the rate of ₹330.4 per kit, the rates were revised to ₹725 as the prices went up due to shortage of human resources and raw material during the lockdown,” the report said.

“Up to March 26, orders for 10 lakh kits were placed with various companies including the centrally approved Mssrs HLL. However, only 77,250 kits had been delivered. As our stocks were depleting, the price fixation panel had to revise the rate and allot the contract to Plastisurge. However, a part of the order was later cancelled owing to poor quality. Following that, PPE kits were available locally and the prices came down,” the report stated.

Rate of sanitisers

With regard to the allegation that sanitiser bottles were procured at a higher rate than that quoted by first and second lowest bidders who participated in the tender, the department claimed that the first and second lowest bidders had violated tender norms by not delivering the complete order by the stipulated time. Hence, their orders were cancelled.

“Moreover, as the raw material cost jumped from ₹66 to ₹4,00 and as plastic containers and nozzles had to be imported from China, the cost went up. As there was a demand for 20,000 litres of sanitiser in the State, it had become inevitable for the KSDLWS to procure 25,000 bottles of 500 ml each from two local manufacturers Mahendra Labs and Charan Associates at ₹250 and ₹244.94 each bottle respectively,” the report stated.

Regarding IV fluids, the allegation was that the KSDLWS placed orders with Aculife Healthcare, which had been blacklisted by Odisha, while Kerala too had rejected its tenders.

“We had called for tenders from Fresenius Kabi Company, but they said they needed 2-3 months to deliver the stock. As our stocks were depleting, we needed urgent procurement. As the firm got a stay order on blacklisting by the Odisha government and also as the price quoted by the firm was lower than the lowest bidder, we procured from Aculife,” the report stated.

The department dismissed allegations pertaining to procurement of ventilators and rapid antibody test kits stating that the orders were cancelled after it was found that the company had sent some used ventilators and as the accuracy and efficacy of the antibody test kits was not up to the mark.

Sources in the department told The Hindu that the prices of these equipment now is much lesser than March-April as the demand was high then and manufacturers were few.