Company with no Experience in Ventilators got 373 crores from PM Cares to Make 10,000 Ventilators

It has been recently discovered that Trivitron Healthcare started designing the ventilator and procuring the components after getting the contract from PM Cares.

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Trivitron Healthcare, a 23-year old Chennai-based medical technology company, got orders from the government in early April to make 7000 ‘basic’ and 3000 ‘advanced’ ventilators with all costs incurred by the PM Cares fund. But at the time of getting the order, neither basic nor the advanced ventilator models by Trivitron existed – not even as a working prototype. The total value of this order stands at Rs. 373 crores, as per a simple cost per unit calculation, along with GST. The ‘basic’ model was priced at Rs. 1, 66,376 and the ‘advanced’ model cost Rs. 8,56,800.

All the information was achieved by the RTI filed by transparency activist, Venkatesh Nayak. The prices of these models, at the time of development, solely quoted according to the price of the competitors. However, the tender issued by HLL Lifecare, a public sector enterprise that has been looking after the COVID-19 needs for the Narendra Modi government, does not mention any provisions for two ventilator types with such a huge price gap. Also, the orders did not come to Trivitron from HLL, but from an Andhra Pradesh-based enterprise, Medtech Zone (AMTZ). In an interview given to the HuffPost, Trivitron revealed that HLL gave AMTZ the order for 13,500 ventilators and AMTZ gave 10,000 of those to Trivitron. Five months later, as the companies struggle to fulfill the orders; the contracting process between these three companies is in shambles.

No dispatch from Trivitron

The co-CEO of Trivitron, Satyaki Banerjee says, “Immediately after we received the order, we started the process of procuring the components and simultaneously designing a ventilator to meet specs given by HLL. Despite huge exposure of our investments into this project, we have no certainty of supplies, despite following everything which was mentioned in our P.O. given by AMTZ endorsed by HLL.”

According to them, they worked with efficient cost and effort amidst the pandemic, but they have yet not received any dispatch orders from HLL. As a result, Trivitron has not delivered even a single ventilator of this contract. Banerjee wrote in his mail, “We do hope better sense prevails and a fair and transparent procedure is followed by the Tendering authority and DGHS [Directorate General of Health Services], and they fulfill the purchase order given to us.”

Confusion from the first stage

After communicating with a number of ventilator manufacturers who got these contracts from HLL, it was found that there has been confusion since the very beginning. Nayak of Commonwealth Human Rights Initiative says, “In the RTI response, HLL did not provide specific queries related to the formation of technical committees, quantities of ventilators which failed to perform or did not meet technical specifications, and details of hospitals where ventilators were supplied. Several of these companies do not have a well-established track record of manufacturing crucial medical supplies to be used in critical patients. Withholding such crucial information is problematic.”

Confusion with the prices at which HLL was buying the ventilators also surfaced. Between, March 27 to April 17, they agreed to pay Rs. 1.67 lakh to Rs. 15.34 lakh per unit for 28,963 ventilators by AgVa and Elisa 600 by BPL. The manufacturer said, “These details were not put in the public domain, but shared on a need to know basis. There was no such differentiation at the specification level. But later on, based on some unknown criteria, HLL categorized some machines as ‘advanced’ and some as ‘basic’.”

The constant shift in timelines

Along with confusion and the prices, HLL capped shifting the timelines and initially said that they needed the ventilators by June 30. For this reason, many companies placed a smaller bid keeping the deadline in mind. However, the deadline was subsequently relaxed and similarly, delivery dates were also being pushed in the absence of a dispatch order for the thousands of ventilators that the Modi government had ordered. Now that the companies are ready with the orders, they are waiting for the government to purchase these ventilators from them, but there is no response.

Banerjee from Trivitron said in an interview, “Our dilemma is that we received an order, invested a whole lot of money and efforts in developing a ventilator, and we want to supply them at a time when it’s really meaningful. The number of Covid-19 cases in India is rising every day, and we are ready to supply ventilators. All we need is a supply schedule.”

Suggestions placed by the Policy Times

  • This strange case of how a company which has never made a ventilator before got a government tender and is still waiting to receive delivery dispatch is a grant example of the misguided attempt of the Modi government to procure 58,850 ventilators by spending over Rs. 2000 crores.
  • Riddled with anomalies, along with no public audit of the PM Cares fund, the entire donation amount seems to indicate a major scam of this decade.
  • As other ventilator manufacturers who got the contract from HLL also face the same issues, the credibility of the government and its trusted enterprises comes in question as well.
  • If the government has no control over how their contracts are fulfilled by the enterprises that get the orders, then the smaller companies will continue being exploited.
  • Immediate action must be taken to take the ventilators from the companies as per the contract, but one must not forget that this is the same government which allowed a company to make ventilators that had no experience in it at all.
  • There must be some regulations laid to guide the competency of each company for procuring medical gadgets.
  • Also read: Unlocking India: Is Indian healthcare healthy enough for Covid-19 surge?
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Company with no Experience in Ventilators got 373 crores from PM Cares to Make 10,000 Ventilators
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It has been recently discovered that Trivitron Healthcare started designing the ventilator and procuring the components after getting the contract from PM Cares.
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THE POLICY TIMES
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