Startling revelations emerge about New GPC/MOH drug contracts

January 15, 2013 | By | Filed Under News 

- Govt MPs rush to defend New GPC

Government’s purchase of drugs for its hospitals in 2010 came under scrutiny yesterday with revelations that one controversial business, with close ties to former President  Bharrat Jagdeo, was not only granted billion-dollar contracts under questionable circumstances and was paid tens of millions to store these drugs.

Member of the Public Accounts Committee yesterday during a fiery clash on government’s drug purchases.

The examination of Report of the Auditor General for the Year 2010 yesterday by the Public Accounts Committee (PAC) of the National Assembly was fiery as Government sought to defend the purchases.
At the centre of the controversy is the New GPC, whose principal is Dr. Ranjisinghi ‘Bobby’ Ramroop.
Yesterday, there were verbal clashes between the government and opposition Members of Parliament who form PAC, the Parliamentary body which has oversight on the audit reports of state entities.
The situation became so tense yesterday that there were ad hominen attacks, with even former Finance Minister Carl Greenidge, being told by Government’s Bibi Shadick that he was a poor Chairperson of the proceedings.
Odinga Lumumba, another Government functionary who is a member of PAC, threatened Jaipaul Sharma to have New GPC take legal action for suggesting that the company was involved in a conspiracy to defraud the government.
Criticisms
Even the Auditor General, Deodat Sharma, was criticised for poor wordings in his report which was causing much misunderstanding.
Representing the government benches on PAC, in addition to Lumumba and Shadick, was Manzoor Nadir.
Jaipaul Sharma and Keith Scott of A Partnership For National Unity (APNU) and Trevor Williams of Alliance For Change are the representatives of the Opposition.
Under questioning were several officials of the Ministry of Health (MOH), including Leslie Cadogan, Permanent Secretary; Finance Manager, Sandra Singh; Manager of the Materials Management Unit (MMU), Laluparam Hariram; Trevor Thomas, Deputy Permanent Secretary, and Marcia John, another official of the MMU.
Sharma, especially, was relentless in his line of questionings.
The Ministry of Health has been under the microscope for a number of years now for its drugs purchases after suppliers complained that New GPC was given preferential treatment.
The Auditor General Report of 2010, which was the subject of yesterday’s discussions, spoke of a July 2009 fire which destroyed records of the drugs purchases and the Ministry’s headquarters in Brickdam. A number of persons have been charged and are in court.
While the Ministry was able to reconstruct vouchers for almost $40M, it has still been unable to verify whether drugs to the tune of $222M were delivered in 2010.
A process using receipts from elsewhere and contracts are being used to ascertain the amounts delivered.
Also hotly debated was how the Ministry did not follow competitive bidding processes and as such allowed $1.252B in contracts to be granted to New GPC to deliver drugs in 2010.
Government disclosed that it has moved for a new concrete building and fire-proof cabinets although it has not yet taken action to have records duplicated off the site of the main office.
The Auditor General said that he has since ordered that copies of all contracts with the Ministry of Health be lodged with his office, with the office of the Finance Secretary and at the Accountant General’s office.
Rental windfall
Regarding the award of the drugs, the Ministry insisted that in November 2010, it advertised for companies to be pre-qualified to become suppliers for drugs and medical supplies. The National Procurement and Tender Administration Board (NPTAB) decided in December of that year who the suppliers were. These included PAHO, Medpharm and New GPC.
Nadir made it clear that non-reconciling does not necessarily mean that New GPC had not delivered the $222M. However, Williams pointed out that it was the Auditor General who was saying so…not the Opposition.
The Permanent Secretary, in response to questions, said that it is the Ministry’s policy to sever contracts for non-performance. He also said that despite the Ministry bond being at New GPC compound in the former Sanata Textiles Limited compound, Industrial Site along Mandela Avenue, Ministry officials had a system to ensure strict monitoring.
Government had been renting the bond from New GPC since late 2007, with Supply Chain Management System (SCMS), a consultant company sponsored by USAID, a donor agency, paying $1.5M monthly.
This arrangement with SCMS ended last year July and from then Government picked up the tab to December.
New GPC would have collected more than $90M since 2007 for storing the drugs. That disclosure immediately raised the eyebrows of the Opposition members of PAC who found it strange that a supplier was allowed to have such an arrangement.
Lack of storage
Lumumba, however, was quick to rush to Government’s defence, saying that Guyana was suffering from a lack of storage facilities. He even insisted that the $1.5M was cheap and that there was no hanky-panky as being painted by the Opposition.
The Ministry of Finance Officer, regarding questions how New GPC was allowed to become eligible for sole tendering awards in 2010, pointed out that it was a Cabinet waiver that allowed this to happen in March of that year.
At that time, it was President Jagdeo who was in charge.
The health officials admitted that it never exercised options of severing New GPC contracts for non-delivery. AFC’s Williams immediately concluded that it may be that the Ministry sanctioned short deliveries without any actions taken for recovery.
Lumumba, at one point, said that the Auditor General should go to jail for how he worded his report on the drugs purchase.
The Ministry officials also made it clear that they do not accept drugs with a shelf life of less than six months and although this is not included in contracts, “it is something understood by all suppliers.”
In 2010, Hydar Ally was the Permanent Secretary, a fact that Sharma said that it is now known who should be investigated. The Ministry also stressed that there was no violation of the procurement and prices, services and a number of other factors were used to choose the supplier…not only prices.
The Ministry officials also admitted that its contracts do not stipulate that drugs have to be delivered within a particular year, despite the monies being paid up front, a disclosure that alarmed the MPs.
The role of the PS was also questioned in the award of contracts. It was revealed that the PS would from time to time be appointed as chairperson of the evaluating committee.
There were more disclosures. In addition to paying upfront, the Ministry would wait until there was need for the drugs before ordering from New GPC.
The Ministry officials have been given two weeks to supply additional documentations, including the 2010 drugs contracts.

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