Tk 343cr blocked for ‘irregularities’ disbursed to health ministry after a year

The finance ministry has finally disbursed more than Tk 343 crore to the health ministry to pay the dues of contractors who allegedly supplied substandard medical devices at inflated prices during the first wave of the Covid-19 pandemic.

The fund was disbursed from Tk 10,000 crore earmarked exclusively to provide emergency response to deal with the Covid-19 pandemic in the current budget, according to a circular issued by the Finance Division on Monday.

The health ministry was pursuing the finance ministry to release the funds for months, but the finance division was denied as there was a huge scam in the purchase of medical devices.

From March through April when the first wave of pandemic hit the country last year, the health ministry was allocated Tk 1,225 crore to buy the medical devices under 198 packages. Of the figure, the gross irregularities were unearthed in 57 packages worth more than Tk 343 crore.

A seven-member probe team led by the Additional Secretary of Health Services Division Shahadat Hossain found the irregularities.

Sixteen officials of the health ministry involved with the purchase project ignored the procurement rules and regulations, according to the findings of the team.

Although the purchase was supposed to get approval from the head of the purchasing office, it was not done, said an official.

As per the rules, if the purchase of public goods is more than Tk50 crore, the concerned ministries or agencies need approvals of the Cabinet Committee on Economic Affairs and the Cabinet Committee on Public Procurement.

In this case, the purchase committee of the health ministry also grossly violated the rules, said a member of the probe panel.

“The procurement process was full of irregularities, flawed and errors,” he said.

To get back unpaid bills, the suppliers were putting pressure on the Central Medical Stores Depot (CMSD), the government agency that had distributed the medical equipment to the different hospitals.

“Later, the health ministry pushed the finance division for the disbursement of funds,” said the official.

Business Insider Bangladesh contacted Health Secretary Lokman Hossain Miah but he declined to comment.

Shahadat Hossain, the head of the probe panel, also did not respond to several phone calls and texts.

What the 16 officials accused of irregularities told the probe committee:

The accused officials and employees appeared before the Health Division in January.

Apart from the then CMSD Director Brigadier General Md Shahidullah who died from the Covid-19 during the investigation, others submitted their written statements before the probe committee.

Each of them had just performed the desk-related activities as directed by the higher authorities, according to their statements.

It was challenging to set up vital medicines, labs, and healthcare workers to protect people from the deadly virus as soon as possible, said a statement.

On March 22 last year, in response to a writ petition, the High Court had directed the CMSD to continue the supply of medical equipment used to deal with the Covid-19.

So, they have done the procurement process in the quickest time under the direction of the higher authorities, according to one of the statements.

In February this year, the CMSD wrote to the health ministry saying suppliers were putting pressure on it to pay their dues. The letter said the image of CMSD has been tarnished due to a faulty procurement process.

The medical devices purchased by the procurement committee are now being used in the public healthcare institutions.