“N ever 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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