Delhi Health dept report finds ‘no overpricing’ in procurement

A report submitted by the Delhi health department to the city government’s Directorate of Vigilance has found no evidence of overpricing in the procurement of medicines, medical equipment and hospital supplies, arguing that official procurement records show several purchases by the government’s Central Procurement Agency (CPA) were made at rates comparable to, or lower than, those paid by other government institutions across the country

A report submitted by the Delhi health department to the city government’s Directorate of Vigilance has found no evidence of overpricing in the procurement of medicines, medical equipment and hospital supplies, arguing that official procurement records show several purchases by the government’s Central Procurement Agency (CPA) were made at rates comparable to, or lower than, those paid by other government institutions across the country.

The report comes amid parallel investigations by the Anti-Corruption Branch, the Directorate of Vigilance and the Enforcement Directorate into alleged irregularities in procurement by Central Procurement Agency (Representative photo)

The report cited records from the Centre’s Government e-Marketplace (GeM) portal to contend that key items – oral rehydration salts (ORS) sachets, handheld ultra-portable digital X-ray machines, among others – were procured at prices in line with prevailing government procurement rates. It added that price comparisons alone cannot determine the legality or efficiency of a procurement process, noting that issues such as tender specifications, vendor selection, quality standards, delivery schedules, inventory planning and procedural compliance remain under investigation.

The report comes amid parallel investigations by the Anti-Corruption Branch (ACB), the Directorate of Vigilance and the Enforcement Directorate (ED) into alleged irregularities in procurement by CPA, which functions under the Directorate General of Health Services (DGHS). ACB had earlier alleged procurement irregularities and arrested former DGHS director and CPA chief Dr Vatsala Agarwal, along with Neeraj Chopra, former deputy controller of accounts for CPA and Dr Vinod Ranga, former head of CPA, in the case. Investigators are examining allegations relating to pricing, tender conditions, vendor selection and inventory management.

Delhi health minister Pankaj Kumar Singh has also written to Union health secretary Rupesh Thakur seeking an explanation for the basis on which allegations of inflated procurement costs for medicines, surgical items and medical equipment were accepted and referred for investigation.

An official familiar with the report said the health department placed GeM procurement records before the Directorate of Vigilance to demonstrate that prices should be compared with comparable government procurements rather than retail market rates. “The investigations into all other aspects of the procurement process are continuing independently,” the official said.

The report specifically addresses allegations relating to procurement of WHO formula ORS sachets, portable digital X-ray systems and hospital-grade bedsheets.

On ORS procurement, it said allegations that the Delhi government paid inflated prices do not stand up to scrutiny. According to the report, several government organisations such as Northern Coalfields Ltd, Employees’ State Insurance Scheme (Odisha), SAIL Bhilai Steel Plant, IISCO Steel Plant, PGIMER Chandigarh, Western Railway Jaipur, Banaras Hindu University and Lok Nayak Hospital, procured such WHO-ORS at ₹8.74 per sachet.

In comparison, CPA procured 1.5 million ORS sachets at an effective price of ₹8.69 per sachet before GST after a 60.5% discount on the printed MRP of ₹23.11. The report said the Delhi procurement was approximately ₹0.05 cheaper than comparable government purchases.

“The claims of prices as low as ₹2- ₹2.50 per sachet also appear to be based on comparisons that do not establish equivalence in terms of formulation, pack size, quality standards, or institutional procurement requirements… Such figures do not align with the available documentary evidence,” the report mentions.

The report similarly disputed allegations that handheld ultra-portable digital X-ray machines costing around ₹10 lakh were procured for ₹33 lakh. It cited GeM records showing that the chief medical and health officer in Korba, Chhattisgarh, procured a ProRad Atlas machine at ₹32.98 lakh, while the National Health Mission, Chandigarh, and HLL Lifecare Ltd purchased similar systems for ₹33.60 lakh. According to the report, CPA procured the same model at ₹32.98 lakh per unit, matching the lowest comparable government procurement price.

On hospital bedsheets, the report contested allegations that products worth around ₹120 in the retail market were purchased for over ₹400. Reviewing nearly 90 GeM contracts executed between early 2025 and mid-2026, it found institutional procurement prices generally ranged between ₹400 and ₹500 per unit. It argued that comparisons with household bedsheets were misleading because government hospitals require specialised linen meeting prescribed standards for fabric quality, GSM, weave, dimensions and repeated institutional use.

The report cited procurements by AIIMS Rishikesh, Dr Baba Saheb Ambedkar Hospital, Safdarjung Hospital, the chief medical officer in Barabanki and AIIMS Kalyani, where similar hospital-grade bedsheets were purchased for ₹400 to ₹798 per unit. It said the CPA’s procurement, at around ₹400 per bedsheet, was among the most economical.

The investigation follows an FIR filed alleging a large-scale conspiracy in procurement by the Delhi government’s CPA and DGHS, claiming officials colluded with private suppliers to manipulate tenders for medicines, medical equipment and hospital supplies.

It alleged that restrictive technical specifications were drafted to favour companies linked to officials, fake firms were created to secure contracts, genuine bidders were disqualified and procurements were made at highly inflated rates, causing wrongful losses to the government and corresponding gains to private entities. The complaint also alleged irregularities in purchases of ORS, portable X-ray machines, bedsheets, C-arm equipment, anaesthesia workstations and surgical consumables.