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PROCUREMENT AUTHORITY ORDERS HEALTH MINISTRY TO PUT BOTCHED SNAKE SERUM DEAL BACK TO TENDER

Health & Lifestyle

A fight over a multimillion-cedi contract for snakebite serum, first reported by the Daily Statesman in January this year, has ended with the Public Procurement Authority ordering that the deal be put back out to tender.

A fight over a multimillion-cedi contract for snakebite serum, first reported by the Daily Statesman in January this year, has ended with the Public Procurement Authority ordering that the deal be put back out to tender.

The decision promises to end a long-running shortage of medicines to treat one of the commonest emergencies in the poorest regions of Ghana – and one of the deadliest.

Red flags

A tender for supplies of anti-snakebite serum was put out by the Ministry of Health and closed in August 2018. This was followed by just one round of full competitive bidding between six companies. Five then dropped out, some complaining about what they saw as special treatment for one company, which was allowed to review its tender document and offer.

The Ministry of Health then announced that the company ‒ Pharmanova Ltd, owned by the Indian businessman Dhananjay Tripathi ‒ had won the tender. Two rival firms raised objections, claiming that Pharmanova had underbid in the first round.

On 21 March, the PPA ordered the Ministry of Health to rescind its decision to offer the contract to Pharmanova and to put the tender out to the companies which lost in the first round.

The Daily Statesman understands that a member of the ministry’s procurement staff has been forced out following the PPA investigation.

Pricing

A source close to one of the firms involved in the negotiations told the Daily Statesman: “During the bidding, Pharmanova offered the lowest price and was challenged by another company.

“The other companies thought the price they had quoted could be a mistake because there was no way they could have delivered the product at that price. They are all in the industry and know the product price range.”

Pharmanova’s initial offer to supply its trademarked product, Vins, for GHC2,333,500 increased to GHC23 million ‒ against bids for products by two rival firms at GHC20 million and GHC20.75 million.

The rivals claimed it was clear after the first round of bidding that the Ministry of Health’s interest lay in one direction.

Tender cancelled

On 18 January the PPA announced it had launched an investigation into the tender after receiving two complaints. Within a week, the Ministry of Health backed down and said that it had cancelled the tender for anti-snakebite serum.

“What the Minister of Health has decided in effect is to cancel the contract and sweep the whole mess under the carpet,” a partner in one of the rival firms told the Daily Statesman at the time. “We would like to see the supply agreement put out to offer as an emergency order, with everyone [except Pharmanova] able to apply on equal terms.”

With last month’s decision, that is what the PPA has ordered the ministry to do. The serious doubts about cost were compounded by the Authority’s finding that Pharmanova in effect engaged in double bidding.

Same owner

Two companies ‒ Pharmanova Export Private Ltd of India and Pharmanova Ltd of Ghana ‒ with the same owner, Mr Tripathi, bid in the first round. The Daily Statesman source described this as both unfair and borderline illegal.

In its 21 March decision, the PPA agreed and said: “The two companies have the same directors and the same beneficial owner from the documents reviewed. The same person signed as representative of both companies.”

The Authority said: “This amounts to complementary bid submission or low-balling which are [both] forms of procurement fraud.”

The Daily Statesman’s source placed the blame for what he described as mismanagement of the tender squarely within the government department. “All mistakes lie at the door of the directorate of procurement at the Ministry of Health,” he said.

Pharmanova failed to respond to the Daily Statesman’s attempts to get it to put its side of the story. Senior officials at the ministry also declined several opportunities to comment.

The head of the Public Procurement Authority, Dr A B Adjei, was tight-lipped but stressed: “We are the regulatory authority and the arbiter on all procurement contracts relating to the public domain.”

Stocks run out

The PPA’s decision promises to bring to an end accounts of a snakebite serum shortage in the North.

In December last year, the Daily Graphic reported that Wa Regional Hospital had run out of serum and at least three people had died in the previous two months for lack of access to the required medicine.

The acting medical director for the Wa hospital told the paper that it had in fact operated without the appropriate serum for the previous four months.