CAG Flags Irregularities In PPE Procurement By Kerala Govt During Covid-19

Last Updated:January 21, 2025, 23:36 IST

The CAG also found that undue favour was shown to Maharashtra-based San Pharma with the KMSCL providing it 100% of the purchase value of the PPE kits as advance in violation of the norms

The CAG report comes as a blow to Kerala's LDF government led by CM Pinarayi Vijayan. (Image: PTI/File)

Flagging an additional expenditure of Rs 10.23 crore in March and April 2020, the Comptroller and Auditor General of India reported irregularities in the procurement of personal protective equipment by the Kerala government during the Covid-19 pandemic.

This comes as a blow to the Left Democratic Front (LDF) government led by Chief Minister Pinarayi Vijayan. The findings were tabled in the Kerala assembly on Tuesday.

WHAT DOES THE REPORT SAY?

“In March 2020, the Kerala government accorded special sanction to KMSCL (Kerala Medical Services Corporation Ltd) to procure PPE (personal protective equipment) kits, N95 masks, and other similar commodities to manage Covid pandemic. The Kerala government had in March 2020 prescribed unit rates for PPE kits at Rs 545 with a view to effect price control of essential commodities," stated the report by the Comptroller and Auditor General of India (CAG), on Kerala’s public health infrastructure and management of health services.

The CAG report further stated that four firms, including three regular suppliers to KMSCL had offered rates to supply PPE kits during March 2020. These were within or slightly higher than government-approved rates, it said.

It stated that despite offers at a lower price from regular suppliers as well as in local markets, procurements were made from five firms in March and April 2020 at much higher rates – as high as 300 per cent above the unit rate or previous purchase made. It said this resulted in additional expenditure of Rs 10.23 crore on the PPE kits procured during that period.

The report further stated that on March 28, 2020, Anitha Texcot (India) Pvt Ltd offered to supply PPE kits at Rs 550, which was close to the unit rates prescribed by the government at Rs 545.

“Even though the KMSCL offered to procure 25,000 PPE kits from this firm, purchase orders were issued for the supply of 10,000 only while the ordered quantity ranged from 15,000 to two lakh in respect of other firms that quoted rates ranging from Rs 800 to Rs 1, 550 per unit. On receipt of supply of 50 per cent of the ordered quantity within 18 days of issue of order, it was cancelled on April 15, 2020, stating the reason that supply order was less," the report said.

It added: “It is evident that KMSCL excluded a firm that was supplying PPE kits at a lower rate in order to purchase the item at higher rates from other vendors".

According to the report, the Kerala government said the central government had issued special instructions on March 27, 2020, in view of the urgency involved in the procurement of medical and other essential supplies, for permitting procurement from more than one source. The KMSCL was authorised to buy variants of PPE kits as available in the market, based on necessity and criticality of the situation.

The report said though the procurement was made in an emergency scenario, it does not justify cancelling POs that were economical to the government. Thus, the purchases made from suppliers who were new in the market, at significantly higher rates, resulted in extra expenditure of more than Rs 10.23 crore.

‘UNDUE FAVOURS’

The CAG also found that undue favour was shown to Maharashtra-based San Pharma with the KMSCL providing it 100 per cent of the purchase value of the PPE kits as advance in violation of the norms. It said the company offered to supply PPE kits at the highest rate of Rs 1,550 per unit, as 100 percent purchase value was paid as advance to this company.

In a statement issued by opposition leader VD Satheeshan, he said the CAG report confirms the corruption allegations made by the opposition. “The corruption took place with the knowledge of Chief Minister Pinarayi Vijayan and former Health Minister KK Shailaja. The first Pinarayi Vijayan government carried out this massive looting during the pandemic when people were scared. Beyond saving the lives of the people, the government saw the Covid pandemic as a golden opportunity to fill its own pockets," he said.

He said the CAG report also highlights the massive corruption involved in purchasing PPE kits from Maharashtra-based San Pharma at three times the price. “It was decided to buy PPE kits from San Pharma for Rs 1,550 on the same day that three companies offered PPE kits for less than Rs 500. Former health minister KK Shailaja later revealed that this contract was with the chief minister’s permission. The CAG report also contains shocking information that the contract given to Anitha Testcot for Rs 550 was cancelled and the contract was given for Rs 1,550. The report also confirms the opposition’s allegations that 100% advance was given to San Pharma illegally," he added.

News politics CAG Flags Irregularities In PPE Procurement By Kerala Govt During Covid-19