In early April, Trivitron Healthcare, a 23-year old Chennai-based medical technology company, got government orders to build 7,000 “basic” and 3,000 “advanced” ventilators, paid for from the PM CARES fund. But when Trivitron got the order, neither of their basic nor advanced ventilator models existed—not even working prototypes. The total value of Trivitron’s order works out to Rs 373 crore, based on a simple cost-per-unit calculation including Goods and Services Tax.
Nayak, the transparency activist who shared information obtained under RTI with HuffPost India, said the botched procurement illustrates just why the PM CARES fund must be under the purview of the Right to Information Act with regular audits and the results made public.
These prices for Trivitron models – which were yet to be developed at the time — were based on the costs submitted by its competitors: the cost of the basic model is exactly the same as a competitor product by AgVa; while the advanced model was Rs 8,56,800, just Rs 5,600 cheaper than the bid submitted by Allied Medical Limited. (Prices are inclusive of GST)
But the tender documents contained only one set of qualifying technical specifications, and no stated provisions for procuring two different types of ventilators at such vastly different prices. The tender was issued by HLL Lifecare Limited, a public sector enterprise tasked with procuring Covid-19-related supplies, including ventilators, for the Narendra Modi government.
Trivitron’s order did not come from HLL. It came from Andhra Pradesh Medtech Zone (AMTZ), a public sector enterprise under the government of AP, which has a 270-acre zone dedicated for medical device manufacturing. HLL gave AMTZ an order to manufacture 13,500 ventilators and AMTZ passed on 10,000 of these to Trivitron. Trivitron told HuffPost India that they got the orders when they responded to a request for procurement put out by AMTZ, at prices set by AMTZ.
Five months later, this opaque two-step contracting process between HLL and AMTZ has unravelled into a shambles even as Trivitron, the private company, says they are stuck in the middle bearing the consequences. Trivitron told HuffPost India that they have manufactured the ventilators at great cost and effort in the midst of a pandemic, but HLL is yet to issue them a dispatch order for their ventilators. As a consequence, Trivitron has not supplied a single ventilator that they say they developed specially for this contract.
The strange case of how Trivitron, a company that had never made a ventilator before, won an emergency government contract to make 10,000 ventilators and is now still to receive a delivery dispatch, is illustrative of the Modi government’s opaque, arbitrary and misguided attempts at procuring 58,850 ventilators for a total cost of around Rs 2,000 crore from the PM CARES fund.
While defence public sector enterprise Bharat Electronics Limited was directly tasked with making 30,000 ventilators, procurement for the remaining orders was handled by HLL.
“HLL messed up from day zero,” one ventilator manufacturer who bid for HLL’s contract said on condition of anonymity. “The process was opaque, arbitrary and designed to fail.”