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WHO reviewing contracts given to Satyam

The World Health Organisation has said it has found no evidence of fraudulent practices by its vendor Satyam, even as the UN body began a review of contracts awarded to the Indian IT company.

business Updated: Feb 06, 2009 13:56 IST

The World Health Organisation has said it has found no evidence of fraudulent practices by its vendor Satyam, even as the UN body began a review of contracts awarded to the Indian IT company.

Besides a $ 55.5 million global management system (GSM) project, where Satyam was the key vendor, WHO had awarded three other contracts totalling nearly $ 400,000 to the Indian firm, a WHO spokesperson told PTI from Geneva.

"Satyam is bidding for one future contract, unrelated to GSM," the official said.

Responding to queries on whether the fraud at Satyam would affect the IT firm's dealings with WHO, the spokesperson said, "WHO is reviewing carefully its current contractual agreements with Satyam and possible contingency arrangements for completion of GSM project work, in the event that Satyam were no longer able to perform."

Satyam has been debarred by World Bank, while it has been suspended from the vendor database of the UN Secretariat.

The company founded by Ramalinga Raju, who is in jail pending probe into an accounting fraud disclosed by him, also came in for criticism from the Comptroller and Auditor General of India for its tardy implementation of a project at WHO.

CAG, which was external auditor to WHO, flagged a number of risks associated with the execution of the GSM project.

"Until now, Satyam has carried out technical activities for 21,131 (man) days and thereby may claim a total of $ 28.6 million, exceeding the contracted amount by $ 1.4 million," CAG Vinod Rai said in the audit report submitted to WHO's Health Assembly way back in May 2008.

The $ 55.5 million project was initially targeted to go live in September 2007, but was given its first extension until December 2007, then a second until March 2008 and a third until June 2008, the auditor said. However, even the extended deadline has been missed.

Satyam was contracted as the main system integrator of the project. The contract of $ 27.2 million to Satyam included performance of services for 15,000 man days.

Taking note of the auditors' concerns and those related to "corporate difficulties" at Satyam, the WHO's Executive Board, at a meeting on January 16, said that there was no indications at present of any disruptions in services to WHO.

Asked if WHO would also suspend or bar Satyam, the spokesperson said, "There is no evidence of any incorrect billing by Satyam to WHO, fraudulent or otherwise. The Satyam contract and GSM project expenditures have been subject to both internal and external audit verification."