The report of the Comptroller and Auditor General of India (CAG) has said that crores of rupees were lost due to irregular purchases made by the Kerala Medical Services Corporation Limited (KMSCL) during the COVID period.

The report says that Rs 10.23 crore was spent in excess by purchasing Personal Protection Equipment (PPE) kits at up to 300% over the rates fixed by the government and that Rs 1.02 crore is yet to be recovered from a company that is unrecognised for providing such service and which supplied hand gloves at an inflated rate.

The findings of the CAG fully confirm the dubious transactions during the COVID period that Manorama exposed. The CAG had sought clarifications from the KMSCL in the draft report, and the draft of the final report was sent to the Principal Secretary to the Health Department with the remark that the explanation tendered by the agency was not satisfactory. The CAG had also said that if the authorities had any more explanations, they could be submitted before August 29.

APM Mohammed Hanish, the Principal Secretary to the Health Department, has said that detailed responses to the questions that had been raised during the CAG’s scrutiny of different issues related to the Health Department and the Kerala Medical Services Corporation Limited were being prepared.

The chief findings of the CAG

• PPE kits at inflated rates: The PPE kits were bought at Rs 1,550 apiece even after the government fixed Rs 545 as the price. The order to buy the kits at 300% of the price was placed when four suppliers,including three usual ones, were ready to provide the kits at rates lower than the ones fixed by the government. An additional expenditure of Rs 10.23 crore was incurred when 2,56,000 kits were bought from San Pharma (Rs 1,550), Innov (Rs 1,550), A and A Trading Ventures (Rs 1,185), BNS Healthcare (Rs 1,295), and Kitex Garments (Rs 800-830).
•  Import of gloves: An order for supply of 1 crore gloves at a cost of Rs 12.16 crore placed with Agratha Avion Company, which had come forward with the promise to import and supply nitrile gloves, was against the norms. This is a company that has admitted that it has no prior experience in the field. The establishment could supply only 41.60 lakh gloves. An amount of Rs 1.02 crore (the price of 8.40 lakh gloves) out of the Rs 6.08 crore, equaling 50% of the total cost, that was paid to the company upfront is yet to be recovered.