Health sector contract awarded to automobile company

The Directorate General of Health Services (DGHS) awarded a relatively unknown automobile company a Tk 320 million (Tk 32 crore) contract under a project to supply masks, gloves, PPE and other essential health equipment during the coronavirus pandemic.

The company took an advance payment of Tk 95 million (Tk 9.5 crore), but still failed to deliver the goods on time. When allegations of misappropriation arose, they hurriedly supplied a certain amount of masks and gloves, but 24,000 of the masks were totally unusable.

Official inquiries revealed that the government’s Public Procurement Rules (PPR) and Public Procurement Act (PPA) have been violated in the massive purchase under this World Bank funded project. The health ministry’s inquiry report stated that the project director and other officials were involved in the irregularities to award the Tk320 million (Tk 32 crore) contract to the Zadid Automobiles, a company with no experience in this field.

When a visit was paid to the address of Zadid Automobiles, as given in the health ministry files, no such establishment was found at the location.

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The committee formed to inquire into the corruption carried out in the Emergency Response and Pandemic Preparedness Project (ERPP) has submitted its report to the ministry. Head of the four-member committee, joint secretary of the health services department Saifullah Azim, speaking to Prothom Alo said that they had investigated the matter of Tk 95 million (Tk 9.5 crore) being taken in advance and the goods not being delivered on time. He said, Zadid Automobiles supplied some of the goods for which it has taken the advance payment.

The inquiry report said that according to the Public Procurement Rules (PPR-2008) regarding direct purchase without tender, offer letters are to be issued to several experienced companies. But in this case, a bid from just one company was accepted and the work order issued accordingly. This was a violation of PPA-2006 and PPR-2008.

Officials involved in the inquiry told Prothom Alo that the project director at the time had selected Zadid Automobiles as the single bidder. The evaluation committee did not scrutinize any experience certificate of the company or documents related to the supply of health protection equipment. There was no evidence of any technical sub-committee being formed to prepare technical specifications for the purchase of the goods from this company. Even the price of the goods was higher than that of the market.

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The inquiry report stated that the contract signed between ERPP and Zadid Automobiles mentioned a 30 per cent advance payment to be made within 15 days of the contract being signed. On 21 July, the World Bank released 30 per cent of the payment, that is, Tk 95.7 million (Tk 9 crore 57 lakh. However, the goods were not delivered within the specified time. At the time, the project’s IT consultant Mirza Masud had told the media that the goods were in the warehouse. Later he told the inquiry committee he had said so upon the directives of senior officials

Some goods supplied after questions arose

Sources in the inquiry committee said that after questions arose regarding supply of the health equipment, on 5 August a meeting was held in presence of representatives from the World Bank and Asian Infrastructure Development Bank. At the meeting it was said that the goods were to be sent to the Central Medical Stores Depot (CMSD).

According to the inquiry report, on 23 August the project director informed the convenor of the inquiry committee that 150,000 KN-95 masks, 100,000 gloves and 50,000 N-95 masks had been sent to CMSD. However, on 25 August CMSD informed the committee that there were 2000 masks less and 24,000 of the masks were damp. On top of that, no personal protective equipment (PPE) has been supplied. That is why CMSD hadn’t officially accepted the consignment. Later the supplier asked for time till 15 August to supply the masks, gloves and PPE.

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The project director at the time, Iqbal Kabir, had not mentioned these details clearly and concealed the facts, sources in the inquiry committee said.

When asked about the matter, Iqbal Kabir told Prothom Alo, “I did not supply any mask or PPE or anything after 22 June, that is, when I was placed in the ministry.”

Meanwhile, a visit on Saturday to K/6 Extension of Pallabi, Mirpur, the address of Zadid Automobiles as recorded in the health ministry files, revealed that no such company existed there. There is a six-storey building at that address. On the ground floor of the building there is a tailoring shop and other stores. Above that are residential flats. Three residents of the building, on condition of anonymity, said they had been living there for the past 20 to 22 years and had not seen any such company.

Phone calls were made and messages sent to the cell phone number of Kazi Shamimuzzaman Kanchan, owner of Zadid Automobiles as recorded in the files and messages were also sent to his email address. He has not responded.

Certainly there has been some lobbying in awarding a contract to an automobile company to supply health protection equipment. It is obvious that there are irregularities involved.
Ehteshamul Huq Choudhury, secretary general, BMA
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Project director liable

The inquiry report holds the project director responsible for handing over the contract for the supply of health-related equipment at such a time of the coronavirus crisis, to an inexperienced firm.

Director of the health directorate’s planning and research wing, Iqbal Kabir, was the director of the project from the start. When allegations of irregularities related to the procurement of equipment arose, he was removed from the post and placed in the health ministry.

When asked why an inexperienced firm, that too an automobile company, was given the contract to supply health protection equipment, Iqbal Kabir told Prothom Alo, “I wasn’t alone in awarding the contract to this automobile company. The contract had the approval by the health minister and the secretary of the health services division at the time.”

Health minister Zahid Maleque, speaking to Prothom Alo, said, “The minister is not supposed to know who is being given the contract to supply protective equipment or any such work. That is not even the minister’s jurisdiction. The minister or the secretary approves projects. The health directorate decides who will be given the work. The project director looks after the entire manner and he has the major role in providing work to the suppliers.”

Iqbal Kabir evades the blame for paying the Tk 95 million in advance and indicates that the World Bank must take this liability. He told Prothom Alo, “The World bank directly funded this company and I had no involvement. The funds were paid in keeping with the contract.”

The World Bank’s stand

Prothom Alo sent an email to the World Bank, inquiring about the discrepancies in the project. The institution’s country director (Bangladesh and Bhutan), Mercy Tembon, replied that when the first coronavirus case was detected in Bangladesh in March, the market for equipment related to corona treatment and PPE was unstable. There was also a wide shortage. At the time, in order to tackle the crisis, the project authorities took initiative to procure certain essential items on a limited scale. These contracts will be scrutinized as to whether the work was carried out as specified and if compliance has been maintained. When the World Bank finds evidence of fraud or cheating, it sends this to the government of the concerned country. If the allegations are proven to be true, the company involved in the irregularities is no longer awarded any project work funded by the World Bank.

The World Bank country director said that the bank is giving Bangladesh emergency assistance of USD 100 million, that is, Tk 8.5 billion (Tk 850 crore) to tackle the corona pandemic related health crisis. The World Bank takes allegations of fraud and corruption related to their funded projects very seriously.

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Legal action recommended

The ministry’s inquiry committee said that the failure to supply the equipment in time was a direct violation of the procurement rules. The project director is responsible for awarding an inexperienced company the contract, for which this delay took place. This failure harmed public interest. The committee has recommended legal action to be taken on an urgent basis against the government officials involved in the project’s irregularities.

Speaking on the matter to Prothom Alo, health minister Zahid Maleque said, “Those who have committed these irregularities will be punished, departmental action will be taken. And, as it is, the Anti-Corruption Commission (ACC) is looking into the matter.”

ACC sources said that the owner of Zadid Automobiles, Shamimuzzaman, had been questioned.

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Secretary general of Bangladesh Medical Association (BMA), Ehteshamul Huq Choudhury, told Prothom Alo certainly there has been some lobbying in awarding a contract to an automobile company to supply health protection equipment. It is obvious that there are irregularities involved. Other than taking action in this regard, the government must check if similar discrepancies exist in other projects.

*This report appeared in the print and online editions of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir