Representational image
Denying allegations surrounding the overpriced procurement of rapid antibody testing kits, the Ministry of Health and Family Welfare (MoHWF) revealed on Monday that the entire order stood cancelled owing to the inferior quality of the Chinese kits. Authorities have further said that no loss whatsoever has been incurred by India in the wake of the deal having been cancelled.
The health ministry said that after conducting the scientific trials of the kits imported from Wondfo and another Chinese company (Livzon Diagnostic Inc), the kits from both the companies were found “underperforming” and the orders cancelled.
Why weren’t the kits procured directly from China?
A release clarifying on the issue said that the Indian Council of Medical Research (ICMR) had approached the Chinese manufacturer Guangzhou Wondfo Biotech to directly source the testing kits but to no avail. The ministry disclosed that it had received four bids from the Chinese company, Rs 1,204, Rs 1,200, Rs 844 and Rs 600.
“Accordingly, the bid offer of Rs 600 was considered as L-1,” said the PIB communication.
The release said that the ICMR also tried to source the kits directly from China, adding that several issues hindered the effort to eliminate the Indian intermediaries from the deal. The following reasons were spelt out by the government for not importing the kits directly from the Guangzhou-based company, as per the PIB release:
- There wasn’t any “commitment on logistical issues”
- The Chinese company was demanding a 100 per cent direct advance without any guarantees
- No commitment on timelines
- The rates were quoted in US dollars without taking into account “fluctuation in prices”
“Hence, it was decided to go Wondfo’s exclusive distributor for India for the kit who quoted an all-inclusive price for FOB (Free on Board, logistics) without any clause for advance,” reasoned the health authorities.
How did the controversy erupt?
Two Indian companies, engaged by the ICMR to source the rapid testing kits from China, are now involved in a nasty legal battle in the Delhi High Court. Rare Metabolics Life Sciences Private Limited, the petitioner, demanded the release of 7.24 lakh rapid body testing kits that had been imported from China by another private entity, Matrix Labs. On the basis of an agreement signed between the two companies last month, Rare Metabolics has the exclusive rights to distribute the Chinese kits in India, supplied to them by the importer Matrix Labs.
It has emerged during the legal battle that the manufactured price of the testing kits in China was approximately $3 (Rs 225), with the ICMR buying them at Rs 600 a unit. For an order of five lakh testing kits, the manufacturing cost being approximately Rs 12 crore, the ICMR was estimated to have been billed Rs 30 crore.
The alleged inflation in costs, to the tune of 145 per cent, became a political fodder latched on to by opposition who demanded an investigation into the matter.
“That any human being would try & profiteer from the immeasurable suffering of millions of his brothers & sisters, is beyond belief & comprehension. This scam is an insult to every Indian. I urge the PM to act swiftly to bring the corrupt to justice (sic),” Congress leader Rahul Gandhi had said in a tweet earlier in the day.
However, with the order now being cancelled and not a single taxpayer fund being wasted, the political allegations on the overpricing of kits don’t hold any water anymore.
