KUALA LUMPUR – The lack of documentation surrounding the appointment of Pharmaniaga Logistics Sdn Bhd to procure ventilators for the Health Ministry during the Covid-19 pandemic cost the government a whopping RM13.07 million.
This is according to the Auditor-General’s Report 2021 published yesterday, which revealed that out of the 136 ventilators supplied by the company in 2020 for RM24.07 million, only 28 were usable while the rest were “unsafe” for patients.
Of the 108 malfunctioning ventilators, 15 were returned to their factories overseas for replacements while the other 93 failed performance and quantitative tests executed on them.
“The government cannot seek compensation claims (for the faulty ventilators) as there are no appointment documents between (Pharmaniaga Logistics) and the Health Ministry on ventilator procurements.
The amount of loss suffered over the 93 unusable ventilators is estimated to be around RM13.07 million,” the report said.
It noted the ministry’s claims the procurements were done as part of the company’s corporate social responsibility.
The report detailed that the ministry had originally approved an early payment of RM30 million to the company to secure 500 ventilators, with the total cost of the deal expected to be around RM50 million.
While Pharmaniaga Logistics had then returned RM6.97 million of the initial payment on June 18, 2020, it was agreed at a price negotiation meeting on September 1 of the same year that RM3.97 million be channelled to the company for “upgrading works”, the report said.
This came about after it was discovered that 108 ventilators were not functioning properly.
Based on feedback from the Health Ministry, the evaluation for the ventilator procurement was done based on brochures and catalogues from manufacturers as country borders were closed then, which limited movement activities.
“As such, confirmation on the specifications of purchased ventilators could only be done when the machines arrived at the health facility,” the report said.
It added that no documents regarding dealings on such procurements were provided during the auditing process.
It noted that this hindered the auditor-general’s ability to determine the role and responsibilities of the company as the party that handled the purchasing and dealt with suppliers.
According to a response from the ministry dated October 7 last year, a start-work order was issued to Pharmaniaga Logistics by the ministry’s Medical Development Division on September 2, 2020 based on the price negotiation meeting the previous day.
“No agreement was signed since the purchase was conducted as an ‘emergency procurement’ and the need to have an agreement was not specified in the Treasury Plan 3.3.
“The ministry has also agreed to the company’s offer to provide 18 replacement ventilators based on the cost of the remaining 93 units which will be sent to the Technical Training Centre for skill upgrading,” the ministry said, as quoted in the report.
It was previously reported that the ministry had carried out emergency procurement to ensure the needs of frontliners were adequate since the outbreak of Covid-19 in the country.
Guidelines and procedures under Treasury Plan 3.3, namely the Emergency Expenditure Guidelines (AP55) and Emergency Procurement (173.2) were utilised for the purpose. – The Vibes, February 17, 2023
