AG report uncovers….Ramroop’s New GPC gifted more than US$15M in drug contracts

Nov 10, 2013 News

…overstocking leads to more than US$1.4M in waste – AG

The Auditor General flagged the New Guyana Pharmaceutical Corporation (GPC), owned by Bharrat Jagdeo’s best friend, Dr Ranjisinghi ‘Bobby’ Ramroop, for questionable transactions last year as it relates to drug purchases.

New GPC owner, Dr. Ranjisinghi ‘Bobby’ Ramroop

Speaker of the National Assembly, Raphael Trotman, made the report public this past week and it has revealed that Ramroop’s New GPC received in excess of $3B to supply drugs to the Ministry of Health and the Georgetown Public Hospital Corporation (GPHC). Another $1B was spread across more than a dozen local and international companies.
Ramroop received the largest chunk of the drugs purchased by Government last year and according to the Auditor General, this was done based on the fact that he was pre-qualified since 2010.
This means that in 2010 Ramroop’s New GPC would have been selected to supply drugs to Government without having to go to public tender until that prequalification status expires.
The government through between the Ministry of Health and GPHC spent just over $4B in drug purchases last year.
The Auditor General in his report did have cause to question several of the transactions given that they were undertaken without valid Bank Guarantees.
GPHC last year spent $1.6B in drugs of which $1.1B was handed to Ramroop’s New GPC.
The Ministry of Health last year spent $2.7B procuring drugs of which $1.8B was given to Ramroop’s New GPC.
According to the Auditor General, of the $1.1B handed to Ramroop from the Hospital for drugs, the Ministry of Health was noted to have paid $117M to New GPC on behalf of GPHC.
The report said, “It could not be determined whether the supplier had satisfied the requirements for bank guarantees with respect to the contracts, since these were not provided for examination.”
GPHC in responding to the Auditor General’s request confirmed that “there were no bank guarantees since payments made to the New GPC Inc. were on a monthly basis and not a one-time payment to reflect the contracted value.”
Deliveries from these contracts were also made periodically during the year.
According to the Auditor General, at the time of writing the audit report earlier this year, New GPC Inc. was still to deliver more than $8M in medical supplies to the hospital.
The Auditor General also found that GPHC entered into a supplementary contract with the New GPC Inc for medical supplies valued at $114.5M and this was paid for by the Ministry of Health.
At the time of reporting, earlier this year, “New GPC Inc. was still to deliver medical supplies valued at $58.6M,” on that supplementary contract.
This would mean that New GPC was still to supply a total of $66.6M in drugs to the Hospital at the time the report was completed earlier this year.
The Auditor General additionally found when a physical verification exercise was conducted at the GPHC off site location and the Pharmacy Bond, that there were 265 instances of expired drugs as at June 2013, totalling $65M.
Meanwhile over at the Ministry of Health, the Auditor General uncovered an even direr situation.
According to the Auditor General, the transactions with New GPC Inc. and the Ministry of Health included fifteen contracts valued at $1.6B.
The contracts were supported by five bank guarantees and while they were required to be valid for one year, each of those supplied by Ramroop’s New GPC, had a validity of only three months and a set expiry pattern in months ending August 2012, January 2013 and April 2013.
“There were no guarantees in force at the time of the examination, but the contractor was still to deliver goods valued at $164.6M”
Even more worrying was the fact that the Ministry was also still to receive drugs that it paid for as far back as 2008.
“At the time of reporting, outstanding deliveries for the year 2011 totalled $59.8M…The position remained the same for 2008, in that the Ministry is still to provide evidence to support deliveries valued at $79.3M,” the Auditor General said.
The Auditor General also found that “large quantities of pharmaceuticals and other medical supplies were kept in stock at a number of bonds and warehouses…In consideration of the fact that there were 327 items of expired stock with an approximated value of $208.090M, overstocking must have been a contributory factor.”
This would mean that between GPHC and the Ministry of Health, more than $273M in drugs had to be discarded last year.