Frontline: National: Tuesday, August 18, 2020.
Ventilators funded with government
money do not seem to meet the required standards, and the way they were
procured point to flagrant violations of rules and norms at multiple levels.
“Never let a good crisis go to waste.”
This quote, attributed to Winston Churchill’s motivational public engagements
during the Second World War, has once again come into wide circulation against
the background of the COVID-19 pandemic in India. The bon mot has been repeated
with diverse emphases in different contexts. But sections of the Indian
business class, officialdom and political apparatus seem to have taken it to
heart in a totally mercenary manner and exploit the health crises caused by the
pandemic to enhance their financial resources through means that are legal,
extralegal or even illegal. Several key public health initiatives of the
government, such as the Prime Minister’s “special package” to reduce dependency
on imported APIs (active pharmaceutical ingredient) and drug intermediates and
“allotments from PM CARES Fund to expedite the purchase of ventilators required
for critical care of acute patients”, seem to have been tainted by questionable
financial deals. Notably, many of these deals seem to have been done without
due diligence and appropriate processes and the deciding factor appears to be
the proximity of the business class beneficiaries of the schemes to the
political leadership, including Prime Minister Narendra Modi (see “A scam in
the making”, Frontline, July 31, 2020).
The Frontline expose showed how B.R.
Shetty, a business tycoon based in the United Arab Emirates and a
self-proclaimed “blind diehard follower and disciple” of Prime Minister Modi,
was the closet beneficiary of the private-public partnership scheme to reduce
dependence on imported APIs and drug intermediates, which was launched amidst
the pandemic. Some discrepancies with regard to the purchase and deployment of
ventilators had already come out in the open, particularly in relation to the
ventilators that were procured for the Ahmedabad General hospital from Jyoti
CNC Automation Ltd, a Rajkot-based firm, whose owners are close to both Prime
Minister Modi and Gujarat Chief Minister Vijay Rupani. However, a perusal of
the details of the purchase of ventilators at the national level makes it clear
that the Ahmedabad story may well be just the proverbial tip of the iceberg.
Using the Right to Information (RTI) Act and other means, social activists and
independent investigators have sought clarifications on the ventilator deals.
The responses from several government and quasi-government agencies to these
queries have been marked by systematic denial of information, indicating a
possible cover-up.
The procurement story
The national level procurement and
deployment of ventilators was done on the basis of the recommendation of the
“Special Empowered Group” (SEG), which the Union government set up in the third
week of March under the chairmanship of NITI Aayog CEO Amitabh Kant, to urgently
procure ventilators in the months of May and June. When the SEG was set up, it
was estimated that over two lakh ventilators would be required by mid May,
whereas only 19,398 high-end ventilators were available. The Union government
cited this shortfall when it earmarked Rs.2,000 crore under the PM CARES Fund
to procure some 60,000 ventilators. On March 27, the SEG floated tenders for
the procurement of 20,000 ventilators, one-third of the total number identified
as needed urgently.
The SEG’s frame of reference had the
clear objective of developing collaborations with the private sector,
non-governmental organisations (NGOs) and international agencies and overseeing
and guiding cross-sectoral dialogue on production of health equipment and
personal protective equipment (PPE). HLL Lifecare Ltd was eventually designated
as the sole agency to carry out ventilator procurement. By the last week of
April, however, the estimate for the total number of ventilators to be bought
was revised to 60,884. Additional tenders for as many as 40,884 ventilators
were issued separately; this includes a tender issued on April 18, 2020. At the
end of all this, on May 1, HLL Lifecare Ltd placed orders to procure 60,884
ventilators, of which 59,884 ventilators were to be ordered from Indian
manufacturers.
The following Indian companies were
also among those that got orders to manufacture ventilators: joint venture of
Bharat Electronics Limited (BEL) and Skanray Technologies Private Limited,
Mysuru, Karnataka, for 30,000 ventilators; joint venture of AgVa Healthcare and
Maruti Suzuki Limited, for 10,000 ventilators; Andhra Pradesh MedTech Zone
(AMTZ), a medical devices manufacturing initiative of the government of Andhra
Pradesh, for 13,500 ventilators; Allied Medical Limited (AML), Gurugram,
Haryana, for 350 ventilators. The deadline for delivery was June 30. However,
only AML had supplied the full order of 350 ventilators by the first week of
July.
In response to an RTI query filed by
the social activist Saket Gokhale, BEL stated on June 15 that it had produced
4,000 BEL-Skanray ventilators against an order of 30,000. However, in a press
note on June 23, the Prime Minister’s Office stated that only 2,923 ventilators
had been manufactured until then. BEL-Skanray’s claim in the last week of June
was that 15,000 of the order for 30,000 ventilators had been delivered. As of
the first week of July, AgVa Healthcare and Maruti Suzuki Limited delivered
1,500 of the order for 10,000 ventilators. Details of deliveries by AMTZ are
not available.
Significantly, AML has a track record
of having supplied more than 2,000 ventilators to many State governments and
hospitals in the public sector, including Army hospitals, over a considerable
period of time. The BEL-Skanray collaboration and the AgVa Healthcare-Maruti
Suzuki association were stitched up after the COVID-19 outbreak. According to
technology specialists focussing on the clinical equipment industry, AgVa and
AMTZ have no prior experience in manufacturing high-end ventilators. These experts,
who did not wish to be named, pointed out that manufacture of high-end
ventilators was time-consuming and that the government had either misjudged the
capacity of these companies to deliver or had misrepresented facts about them
deliberately.
Even more significantly, of the
ventures that received the orders, only AML seems to fulfil the certification
and accreditation requirements specified in the tenders floated for the
ventilator contracts. Certification bodies in India are accredited by the
National Accreditation Board for Certification Bodies (NABCB). Globally,
accreditation is done by a member of the International Accreditation Forum
(IAF). An important requirement in the tender was that the ventilators must be
certified by the United States Food and Drug Administration (FDA) or they must
have European Union standard of CE marking. (CE marking is a certification mark
that indicates conformity with health, safety and environmental protection
standards for products sold within the European Economic Area (EEA). The CE
marking is also found on products sold outside the EEA that have been
manufactured to EEA standards. Governments within the EEA framework as well as
outside periodically insist on CE certification. There are authorised agencies
that can provide this certification.) No Indian manufacturer has an
FDA-certified ventilator, though AML has ratified CE certification. Medical
equipment specialists and researchers at different levels have questioned
Skanray’s claims about having CE certification. AML’s director, Aditya Kohli,
has also expressed doubts on Skanray’s claims.
Problems in the tender and
certification
Separately, KEN, the niche portal
primarily focussing on technology issues, pointed out in early July that apart
from non-compliance of these firms with the specific parameters mentioned in
the tender, there were fundamental problems with the tender itself. According
to KEN, the open tender released by HLL was based on the specifications of
AgVa’s ventilator. KEN claimed that that the minutes of an HLL meeting that it
had obtained proved this. The portal further pointed out that the tender
specifications were released in the public domain a full 18 days after they
were decided. “So, while AgVa sat pretty, nailed on to win the tender, other manufacturers
were at a disadvantage,” the KEN article said. KEN said that HLL did not
respond to questions sent by email.
The portal has pointed out other
issues related to certification. AgVa apparently has a certificate from a
third-party company that says it is FDA-compliant. The portal says: “There are
two problems with this. The FDA doesn’t certify companies, just products. And
the FDA compliance can only be issued by the FDA itself. In 2018, AgVa was
certified by Unitas Certification Services, a company with a UK-based address.
Unitas, incidentally, doesn’t appear to exist beyond its website. As recently
as last month (June), AgVa received an IEC 6,0601 compliance certificate from
NFI Certifications Ltd, another UK-registered entity, which appears to be a
shell company. According to company filings, it has assets worth £1 ($1.25).
AgVa did not respond to questions sent by email.” The KEN article went on to
add that the absence of relevant laws had not just led to a rise in the
importance of accreditation bodies but had also spawned an entire industry of
opportunistic and unscrupulous certification companies
(https://the-ken.com/story/ventilator-procurement-problems).
Unanswered questions
Saket Gokhale’s pointed RTI queries on
the pricing of ventilators elicited obfuscatory responses from these entities,
including BEL. Gokhale had sought information on the number and price of
ventilators bought with funds from PM CARES and asked for copies of invoices.
BEL rejected the query saying that the request was “non-specific with regards
to time”. Saket Gokhale pointed out that the PM CARES purchase was billed as a
one-time order to be delivered by June 30. Gokhale had also asked how many
BEL-Skanray ventilators were bought between March 25 and June 18 at what cost and
which hospitals these were supplied to. This question was not answered on the
grounds that “giving this info would harm the competitive position of BEL”.
Gokhale wonders how a “a public authority” can argue about harming its
competitive position. He says that BEL is not in the ventilator business and
that the ventilators it is manufacturing along with Skanray constitute only a
COVID-related government project funded by PM CARES. More importantly, he
notes, a government-owned company cannot suppress information on the prices at
which it sells to the government.
On pricing, too, Saket Gokhale has
raised pertinent questions. He points out that PM CARES has allocated Rs.4 lakh
for every ventilator. According to the company’s own publicised claims, AgVa
Healthcare ventilators are priced at Rs.1.5 lakh. The designer of BEL-Skanray
ventilators, Dr Hiremath, said on record that their price was under Rs.1 lakh.
“So, where is the extra money going?” asks Saket Gokhale.
Amidst all this, new advisories by the
Union Ministry of Health and allied agencies are underplaying the importance of
ventilators in treating COVID patients. According to the findings of some of
these agencies, most patients in India require only simple oxygen delivery
through nose prongs, using non-invasive ventilation (NIV) or BiPAP mode. Only 5
per cent of COVID patients need ventilators for invasive ventilation, they
claim.
In the light of this new
understanding, estimates for the number of ventilators required are set for a
drastic revision from the original estimate of two lakh instruments. Even so, questions
on the pricing, certification, underproduction and inadequate delivery of
ventilators remain, as do questions on their quality and functional efficiency.
Doctors at the Postgraduate Institute of Medical Education and Research
(PGIMER), Chandigarh, rejected, in the last week of July, 10 ventilators
delivered to the institute. The machines, bought with PM CARES funds, were
found to be “not effective” and “faulty”.
Sources at the institute revealed that
a total of 20 ventilators were sent to two health care facilities in
Chandigarh. Ten were given to Government Medical College and Hospital and the
other 10 were sent to PGIMER for its COVID-care hospital. Sources at the
hospital said that a team of doctors—pulmonologists, anaesthesiologists and
intensive care experts—carried out regular and mandatory checks on the
ventilators. The majority opinion of the team was that the ventilators were not
up to the mark. “We cannot use these substandard machines and put patients,
especially COVID patients, at risk,” a senior doctor said.
A couple of weeks earlier, doctors at
Ahmedabad General hospital had rejected many of the ventilators bought from
Jyoti CNC Automation Limited for the same reason.
These rejections highlight the
flagrant violations, mismanagement and suspected underhand dealings in the
procurement and deployment of ventilators funded by PM CARES. An investigation
seems to be in order. However, the Prime Minister and his government have
steadfastly ruled out any sort of inspection of PM CARES funds and what it
spends on.
The ventilator story gets curiouser
and curiouser.
Sheetal P. Singh is a freelance
journalist and social activist. He is co-founder of the Satya Hindi web portal.
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