House committee to seek clarification from minister on procurement deal with OmniHealth ministry officials involved in the procurement defend it saying they adopted a fast-track process to get the essential goods at the earliest.
The Public Account Committee of the House of Representatives has decided to summon Minister for Health Bhanubhakta Dhakal after recording statements from officials involved in the controversial deal to procure Covid-19-related medical goods and equipment through Omni Business Corporate International.
In their statements on Tuesday, all three officials— health minister’s advisor Dr Khem Karki, former health secretary Yadav Koirala and former director-general of the Department of Health Service Mahendra Shrestha—involved in the procurement decision, which landed in a controversy over exorbitant pricing of the goods, defended themselves when asked about their questionable roles in the deal.
“We had invited them [the trio] to seek clarification over a committee report about the controversial procurement decision,” said Bharat Kumar Shah, chairperson of the committee. “We will soon invite the minister for health to seek clarification from him as well,” he added.
The report Shah referred to, confirmed that due process was not followed in awarding the procurement contract to Omni, and Dr Karki acted beyond his jurisdiction to play the lead role in selecting the supplier.
The deal landed in controversy after it was revealed that the government didn’t follow the due process while selecting the supplier. Its decision to awarding the contract to a company that quoted higher prices compared to its competitors also prompted the government to terminate the deal on April 1. Authorities even questioned the ability of the company to deliver the goods on time after its first batch of medical goods arrived in Kathmandu.
The medical goods, particularly rapid diagnostic test kits, were found to be substandard, according to the Nepal Health Research Council.
In his statement to the committee, Karki downplayed his role in selecting the supplier saying that he participated in the negotiations for less than 30 minutes. “I had no personal interest in participating in the negotiations with the bidder. I just participated out of compulsion to ensure that the country gets urgently needed medical goods,” he said.
The ministry had formed a negotiating team under Karki’s leadership to select the supplier for the essential equipment. The parliamentary committee said that Karki, an advisor to the health minister, didn't have the legal authority to make recommendations in procurement deals. But, Karki said he didn’t know why he was chosen to lead the negotiating team.
The government on March 26 had assigned Omni Business Corporate International to purchase medical equipment from China after the first cases of coronavirus were reported in the country. Omni brought in its first cache of supplies on March 29, but the Health Service Department cancelled the agreement on April 1 after the deal courted controversy.
According to health ministry officials, Karki not only exercises ‘undue influence’ over the ministry’s decision-making process but is also heavily involved in the transfer of officials from one station to another.
Former secretary Yadav defended the ministry’s decision to assign Dr Karki to coordinate the procurement. “As Karki is an expert and also a government official, he was chosen to lead the negotiating team,” he said. “A ministry team, which included Dr Roshan Pokharel, chose Karki for the job. They may have made a mistake in the legal point of view.”
Former director-general of Department of Health Service Shrestha said Karki was given responsibility legal provisions are silent on who gets to be on the negotiating team. “He had been given the responsibility to just select the supplier,” he said.
The trio said that the ministry decided to award the contract to Omni at the earliest as the country was in great need of medical goods after Covid-19 cases started to soar.
They also said that the supplier was chosen through a fast-track procurement process as per instructions from the erstwhile High-Level Committee for Prevention and Control of Covid-19 led by Deputy Prime Minister and Defense Minister Ishwor Pokharel.
But, lawmakers said they were not satisfied with their response. Minendra Rijal, a member of Nepali Congress lawmaker and member of the committee, said that clarification submitted by the trio wasn’t satisfactory. “Nobody wanted to take the responsibility for the decision,” he said. “The committee will take the necessary decisions after recording the minister’s statement.”