Caretaker tenure in KP: Rs1.9bn irregularities unearthed in medicine procurement

PESHAWAR: Financial irregularities amounting to Rs1.9 billion were unearthed in the procurement of Rs4.4 billion worth of medicines during the tenure of the previous caretaker provincial government.

The findings, submitted to Chief Minister Ali Amin Gandapur, highlight procurement of non-essential items, violations of policy and systemic lapses that led to severe shortage of emergency medicines in June 2024.

The chief minister had formed the committee, headed by Brig (retd) Mussadiq Abbasi, special adviser to Chief Minister Khyber Pakhtunkhwa.

The report will be sent to the National Accountability Bureau (NAB) for further investigation. Abbasi told The News that they were going to initiate departmental action against those involved in the scandal.

The report disclosed that Rs1.86 billion were spent on unnecessary and non-emergency items, while Rs3.17 billion worth of medicines and medical supplies were distributed to a few select centres, with Rs1.08 billion directed to just six facilities.

It was revealed that the district health officer of North Waziristan received a massive consignment of items like gowns, condoms, disposable OT sheets, and gloves, despite no requisition or need.

Eighty-one firms were initially shortlisted for procurement, but purchases were limited to only 14 firms, often at retail prices exceeding factory rates by 10 to 45 percent. Most medicines were procured without inspection, leading to the distribution of substandard products. Pre-requirement and distribution plans were missing from records, while critical steps like drug testing and compliance with import stock regulations were bypassed.

The report noted that Rs50 million worth of medicines were procured from a company flagged for producing substandard drugs. Extravagant transportation costs and unauthorized payment processes further added to the financial burden.

Brigadier (retd) Mussadiq Abbasi highlighted the flaws in the procurement system. He said that the 2015 health policy was originally a devolved policy, where the districts were responsible for procurement, with the center fixing prices and hiring contractors.

“This system ensured healthy competition among contractors and allowed for more localised decision-making. However, the caretaker government’s decision to centralise procurement ignored district-level demands and imposed additional costs like transportation charges, which added to the financial burden,” Abbasi, who heads the anti-corruption department of the KP, explained.

Abbasi previously served in the National Accountability Bureau (NAB) and unearthed many scams.

He said how mismanagement by the caretaker government led to a serious shortfall of medicines in the province. “In many cases, medicines were procured under the names of different doctors, but they were never actually supplied to them. Around Rs750 million worth of medicines were not delivered to the districts, and the contractors, in collusion with others, took the money without fulfilling their obligations,” Abbasi said.

He said that some of the medicines were procured at low prices, but the transportation charges were inflated, often exceeding the actual cost of the medicines.

The report revealed that out of the total Rs4.4 billion procurements, Rs2.75 billion was procured by districts and other entities. The current inquiry is focused on central procurement, with a particular emphasis on the Rs1.9 billion irregularities while the inquiry of district level procurement is in progress.

Abbasi explained, “The procurement process was riddled with inefficiencies. Medicines were purchased at 45 percent higher than the company price, and non-essential items were acquired, deepening the financial irregularities and exacerbating the shortage of emergency medicines.”

He said the involvement of individuals at various levels of the government was evident, saying, “From the chief minister to class-four employees, all levels were implicated in this scandal.”

In response to the crisis, NAB Peshawar ordered an inquiry under Section 18 (D) of its laws, directing the relevant department to provide all necessary records for recovering the embezzled funds and initiating criminal proceedings against those involved. The report noted the severe consequences of these irregularities, which caused a critical shortage of emergency medicines in hospitals and basic health units by June 2024.

To address the issue, the current government procured emergency medicines worth Rs2 billion, ensuring the availability of 90 essential drugs at basic health centers and 174 at hospitals.

The provincial government has revamped the procurement process, replacing the central purchasing system with a district-level mechanism. For the fiscal year 2024-25, medicines valued at Rs12 billion in the market will be procured at Rs5 billion, saving the treasury Rs7 billion.

Additionally, quality assurance measures have been strengthened, and transportation costs have been eliminated.