Drugs purchases scandal…Billion $$$ paid to New GPC upfront

Jan 20, 2013 News

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– importers sidelined, IPA cries foul

As the National Assembly continues to assess disclosures that one pharmaceutical company deliberately lied about millions of dollars for the rental of a storage bond, there are questions now whether Government may have broken the laws.

Ministry of Health officials, testifying before the Public Accounts Committee (PAC) of Parliament about its 2010 deals, last week disclosed that it paid hundreds of millions of dollars in full and in advance to New GPC for deliveries. They even continued the same arrangement in 2011.
This was despite the fact that New GPC may not have delivered $222M in drugs ordered in 2010.
Now, both Members of Parliament (MPs) of the Opposition and at least one drug importer are calling for investigations.
Businessman Lloyd Singh, proprietor of International Pharmaceutical Agency (IPA), who is fighting what he said is an unfair playing field for importers of pharmaceuticals, claimed that his company and others were consistently sidelined.
As a matter of fact, government’s admission that it may have paid New GPC fully while not yet collecting all the drugs ordered is indeed strange.

No performance bond
He pointed that other companies have to lodge a performance bond of up to 10 per cent of the total contract sum so that in case of non-performance or non-delivery, the Ministry of Health would be able to have some level of recouping its monies.
In the case of New GPC, there is no immediate evidence of the performance bond being demanded as part of the requirements.
Singh, who said that he is not scared of being sued as he is and has been speaking what has turned out to be the truth of the drug purchases, wondered whether by paying New GPC in full, the government was not in reality financing the company.

The businessman also said that it is also strange that almost 10 years since it introduced and passed the Procurement Act, Government has failed to have a functioning Public Procurement Commission.
“The Act is not complete without the Procurement Commission. If the Commission was there, you would not have to go to the media to complain. We don’t have the time as businessmen to be dancing around the place. We would be going to the Commission.”

Level playing field
Singh said that he has no problem with New GPC. The IPA official even said that when he was a manager at Geddes Grant, he would advise New GPC owner, Dr. Ranjisinghi ‘Bobby’ Ramroop, who was studying in India, what drugs to order.
“If New GPC was a full manufacturing business involved in drugs, creating jobs, we would not even have problems with the price being 10-20 per cent higher than normal. But New GPC is an importer like us. This is not right.”
The IPA official was not afraid of any lawsuit. “Everything I have said to the press is now becoming a reality…there are no lawsuits coming…we are talking facts here.”
Earlier this week, it was revealed that New GPC which was controversially selected to supply Government with billions of dollars in drugs may have deliberately attempted to hide the fact that it collected almost $100M for renting storage space to the Ministry of Health.
As a matter of fact, the company which has admitted to close ties with former President Bharrat Jagdeo, last year insisted that it was providing warehousing services for free.
Health officials testified before the PAC that between late 2007 and December 2012, New GPC was paid more than $90M to store drugs for Government.
The monies would have mainly come from USAID, a donor agency working with the Health Ministry. This arrangement ended in mid-2012 but the government continued paying the $1.5M monthly until December. The bond facility is in the compound of the former Sanata Textiles in Ruimveldt, now owned by Queens Atlantic.

The payments were in addition to the billions of dollars in contracts that New GPC would have had from government over the years.
Opposition Members of Parliament were angry and suspicious of the arrangements especially as there are questions now that New GPC may have also not delivered hundreds of millions in drugs in 2010.
Last year, speaking about the storage services it was providing, Dr. Ramroop in the Guyana Times newspaper of June 22, last, while attempting to argue that it was doing Government a favour as a good corporate citizen, said that it was incurring enormous cost to provide the free warehousing facility to government.

Cover-up
“Presently, the NEW GPC incurs costs of more than Gy$150 million annually to provide free warehousing for the Ministry. Proper storage of medicines is critical. The truth is that the Health Ministry and GPHC do not and have never had the warehouse capacity to store all the medicines they have in stock,” the Guyana Times report said.
New GPC went even further to hide the payments.
“We must recall that the NEW GPC, as one of the requirements for prequalification, demonstrated that it had the capacity to store greater than 90 per cent of the annual supply that the public sector requires. As a supplier, the NEW GPC agreed to provide the warehousing need as a non-fee service.”
On Thursday, in his newspaper…the Guyana Times… New GPC’s principal, Dr. Ranjisinghi ‘Bobby’ Ramroop, again said that it was free storage that his company was providing to Government.
Government has since said it built a bond in Diamond.
Government has been fighting a battle to defend how New GPC managed to become the main supplier of drugs.
In early 2010, the Cabinet under the Jagdeo administration decided that New GPC would be the sole supplier of drugs.
In 2011, in controversial circumstances also, a number of companies were pre-qualified to become suppliers, including New GPC.
Drug purchases have accounted for a large chunk of the Ministry of Health with New GPC in 2011 being awarded almost 80 per cent of the $13B expended.
The Opposition parties in the National Assembly have expressed alarm over the developments with members of its Public Accounts Committee arm clashing last week during examinations of the 2010 Auditor General’s report.
Hotly debated also was how the Ministry did not follow competitive bidding processes and as such allowed $1.252B in contracts to be granted to New GPC to deliver drugs in 2010.
In recent days, there have been increasing calls for the drugs purchases to be investigated fully.

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