KP medicine scandal: 4 firms fail to deliver supplies worth Rs1.19bn

PESHAWAR: The Khyber Pakhtunkhwa (KP) health procurement scandal has taken a more serious turn following an official inquiry that allegedly revealed four companies failed to deliver critical medical supplies worth Rs1.19 billion, despite having received payments.

However, even after the passage of one year, the current officials of the Health Department have neither taken any action against the defaulting companies nor have initiated any recovery. Instead, the government has shifted the entire blame for the irregularities on to the former director general and other officers involved in the procurement process.

The KP government constituted an inquiry committee to probe the scam, after it was unearthed by Jang and The News on July 28, 2024. The inquiry committee has recommended immediate recovery of funds, blacklisting of the firms, and criminal action against these companies. The inquiry committee further recommended strict action against the officials who failed to make recoveries from the defaulted companies.

The pharmaceutical companies have rejected the allegations, claiming that they delivered the medicines and other supplies at the specified time and location, and possess complete documentary evidence to support their claim.

The inquiry report says the Finance Department had allocated funds for emergency medical items, but a significant portion was spent on non-emergency supplies, including surgical gowns, drape sheets, condoms, examination gloves, and cannulas.

The Director General of Health Services has been directed to identify further irregularities and ensure proportional recovery from officials involved in the mismanagement. The report reveals that four companies failed to supply medicines despite an advance payment of Rs1.19 billion. The report revealed that a company was paid an amount of Rs45,520,000 for OT drapes; the same company was paid another Rs36,275,000 for gowns, but failed to deliver the supplies. Another company was paid Rs55,555,000 for gauze cloth rolls, but the item was not supplied to the Health Department.

Similarly, another company was asked to supply tablets Tenofovir Fumarate 300mg and paid an advance of Rs80,340,000, and the same company was paid Rs2,173,902 and Rs96,141,460 to supply tablets Esomeprazole 20mg and Syp. Cefixime 100mg/5ml, but the company failed to deliver the required medicines.

Likewise, a company was paid Rs858,790,800 and Rs15,937,500 for disposable nitrile examination gloves and latex condoms, but the company failed to deliver the required items.

The inquiry committee has recommended immediate recovery of the misused funds under reference no PNRS 1/10/733662/- and their deposit into the treasury. It further says that the defaulting firms should be blacklisted to prevent future contracts. The committee recommended registering an FIR against the companies and officials involved in the fraudulent procurements.

The Health Department spokesperson told this correspondent that action against the companies that failed to supply medicines, as established in the inquiry reports, has also been recommended for criminal proceedings, which will be initiated shortly.

Similarly, proportionate recovery from the firms, as reported, and blacklisting proceedings will be initiated shortly after responses to the show-cause notices are received for the imposition of penalties. He said that officials are undergoing E&D (Efficiency and Discipline) proceedings, and a tentative penalty —ranging from dismissal from service to recover Rs1.71 billion — is underway. Those employees who have retired will face criminal proceedings to ensure the desired recovery.

When contacted, representatives of the companies claimed that they had delivered the medical supplies within the stipulated time-frame. They stated that they possess delivery challans and other relevant documents, duly signed and acknowledged by the Health Department as proof of completion. The company officials further maintained that all these documents were also presented to the National Accountability Bureau (NAB) during the course of the inquiry to substantiate their claims and demonstrate compliance with the contract terms.