THIRUVANTHAPURAM, Jan 21 : In a blow to the LDF government in Kerala, the Comptroller and Auditor General (CAG) has found irregularities in the purchase of Personal Protective Equipment (PPE) kits by the Pinarayi Vijayan government during the Covid-19 pandemic.
The CAG also found that undue favour was shown to Maharashtra-based San Pharma by state-run Kerala Medical Services Corporation Ltd (KMSCL) by providing it 100 per cent of the purchase value of the PPE kits as advance in violation of the norms.
Responding to the CAG findings, which were tabled in the state assembly on Tuesday, Leader of Opposition in the state assembly V D Satheesan said that the audit report confirms the opposition allegations of corruption in the procurement of the kits during the pandemic.
Satheesan alleged that the irregularities and undue favours occurred with the active knowledge of Chief Minister Pinarayi Vijayan and the then state Health Minister K K Shailaja.
The opposition, in a statement, also alleged that the government utilised the Covid-19 pandemic as a “golden opportunity” to line its pockets.
“On the one hand, the death toll was hidden. On the other hand, corruption worth crores was committed. Then, a false image was built through the propaganda of PR agencies. The CAG report will destroy the PR image,” he said.
Meanwhile, Shailaja said that she was not going to respond to the CAG report as she had not gone through it.
Regarding the opposition’s allegations, she said that the UDF raised the issue several times in the assembly and each time a clear answer was given to them. “So, it need not be raised repeatedly,” she said.
Addressing the CAG’s findings of additional expenditure in procuring kits, as reported in the media, she explained that it occurred during a period of severe equipment shortages and skyrocketing prices.
“Out of the lakhs of kits purchased, only around 15,000 were procured at higher rates. It seems the opposition has forgotten what the situation was like back then,” she added.
Shailaja said that if there was a lack of clarity in the government’s explanation to the CAG, the government would make it clearer.
According to the CAG report, during the pandemic, the State Level Crisis Management Group (SLCMG), for management of Covid-19, decided to authorise KMSCL to pay up to 50 per cent of the purchase value as advance payment to suppliers of items needed for Covid management.
“In violation of the above orders, 100 per cent advance was paid to a firm, viz, M/s San Pharma, which had offered to supply PPE kits at the highest rate of Rs 1,550 per unit,” the report said.
“The firm was issued (in March 2020) orders to supply 15,000 PPE kits at Rs 1,550 per unit for which KMSCL paid an advance amount of Rs 2.32 crore (March 2020) which was the total value of the supply order and the supply was effected in May 2020,” the report added.
Further, the report stated that the Kerala government had clarified that the advance amount was paid for the Letter of Intent (LoI) quantity of 50,000 pieces and amounted to only 29 per cent of the total purchase value of Rs 9.35 crore.
The CAG termed the explanation as acceptable by saying that its audit found that though the LoI quantity was for 50,000 kits, orders were placed for an immediate supply of 15,000 numbers only, as the company was new and the product had not been verified.
“Further, scrutiny of the purchase file also indicated that, on March 31, 2020, it was decided to purchase 15,000 PPE kits only. Hence, the reply of the government of Kerala that the advance was for 50,000 PPE kits is not tenable.
“Since it was decided to purchase only 15,000 PPE kits, the advance payment of Rs 2.32 crore was for the full cost of the ordered quantity,” it said.
The CAG also found that the irregularities in the procurement of PPE kits led to an additional expenditure to the tune of Rs 10.23 crore.
It stated that the Kerala government had fixed Rs 545 as the unit price for PPE kits and four firms, including three regular suppliers to the KMSCL/Karunya division, had offered rates falling within or slightly higher than that approved by the government.
“Despite the availability of offers at lower price ranges from regular suppliers as well as in local markets, procurements were also made from five firms during March and April 2020 at much higher rates, as high as 300 per cent above the unit rate or at higher rates, compared to previous purchases made.
“This resulted in additional expenditure of Rs 10.23 crore on the PPE kits procured during the above period,” the report said.
It also stated that KMSCL excluded a firm that was supplying PPE kits at a lower rate to purchase the item at higher rates from other vendors.
“Thus, the purchases made from suppliers who were new in the market, at significantly higher rates resulted in extra expenditure of Rs 10.23 crore,” the report said.
Satheesan said that the case filed by the opposition against the alleged corruption is under consideration of the Lokayukta and thus, the UDF’s legal battle will continue. (PTI)
Follow our WhatsApp channel
