Karnataka's Directorate of Health and Family Welfare has violated the Karnataka Transparency Act, 2000 by purchasing medical equipment for government hospitals at vastly inflated rates. The directorate has also grossly dishonoured the Transparency Act, which calls for particular format for the tenders, guidelines on the specifications of the rates to be quoted and procedures for scrutiny of submitted estimates.

Between December 2000 to March 2003, the directorate has sanctioned budgets for purchase of equipment to the government hospitals in the State at twice the actual market price, admitted Dr. R. Seethalakshmi, director of medical education, government of Karnataka whose responsibility also includes overseeing medical equipment purchase for government hospitals.

The range of equipment includes mainly nephrology equipment of Nikkiso, Japan marketed by the public sector pharmaceutical major, Karnataka Antibiotics and Pharmaceuticals Limited (KAPL). The directorate instead of placing an order with major medical equipment manufacturers like Wipro GE Medical Systems, Philips Medical Systems, Siemens Medical Systems or Medex India had approached KAPL, which is the government undertaking for sourcing the equipment.

For the last financial year ending March 2003, the directorate purchased 17 dialysis machines for hospitals in Bangalore, Hubli and Mysore at a cost of Rs. 11.24 lakh per machine when market rate was Rs. 5.62 lakh. The department was forced to spend an additional Rs. 95 lakh for purchase of the machines.

A senior official at the Department of Parliamentary affairs government of Karnataka, told this correspondent that departments in the government were not adhering to the Transparency Act. It is mandatory for the directorate to call for tenders by publishing the advertisements in three English dailies. Instead only three Kannada papers were used as a medium of publicity and one was an evening paper. The Act calls for a minimum period of 60 days to open the tenders if the equipment to be purchased is worth Rs. 2 crore instead the directorate has called for scrutiny of tender applications much before the stipulated period.

Further, the directorate has again faulted on the constitution of the committee, which inspects the tenders for the purchase of a item of hospital equipment. The Act says that the committee must be represented by the head of the hospital buying the equipment along with the head of the department purchasing the equipment and an external medical administrator representing from a government hospital. But the committee constituted by the directorate is represented by its members, an equipment contractor and the head of the hospital.

While several private medical centres in the State have purchased the same equipment at a price that is much lower than what the government has paid, officials from the administration section of the Directorate of Health and family welfare have expressed bribes to be passed on at several stages during the purchase of the equipment.

In the last two years, KAPL had chalked out a plan to focus on sales of medical equipment market along with its range of pharmaceutical products for which the state government is a major buyer. The main products are nephrology equipment of Nikkiso, Japan, haemodialysis machines [CRRT unit], Equa Smart haemo-filtration pumps, fluid control systems and water treatment plants. The company sources informed that a dedicated department referred to as the trading section was set-up and sales plan was to include many government medical centres. One dealer- Ashwini Renal Care which is a dedicated renal disposables supplier was identified by KAPL and several machines were installed at government hospitals through them.

An official of Ashwini Renal Centre told this correspondent that they had withdrawn the marketing alliance with KAPL because of certain apprehensions on the deal to market the renal equipment. But Ashwini Renal Centre continued to supply renal disposables which include needles, artificial blood lines etc to KAPL.

The managing director and head of the trading section at KAPL were not available for comments.