ED widens probe, brings BMC’s entire Covid spend of ₹4,000 cr under scanner

The Enforcement Directorate is investigating alleged irregularities in the Jumbo Covid Centres scam, widening its money-laundering probe to include the BMC's entire ?4,000-crore pandemic-related contracts. The ED found incriminating documents and records during searches, including that the civic body purchased Remdesivir at a significantly higher rate than the state government. The agency is also examining allegations that the BMC spent several crore rupees on accommodation for personnel even when there was no need. ED sources claimed that Covid medicines provided to the BMC were 25-30% costlier than in the open market.

MUMBAI: The Enforcement Directorate (ED) has widened the scope of its money-laundering investigation into the Jumbo Covid Centres scam and brought the BMC’s entire ₹4,000-crore expenditure on pandemic-related contracts under its scanner. The step was taken after the ED found alleged irregularities across the board, from the award of contracts to the purchase of medicines and body bags at inflated rates to arranging for accommodation for personnel at locations close to their workplace.

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The agency had, during its searches—including those at 15 locations on Wednesday and Thursday when its team visited to gather details from the BMC’s Central Purchase Department ( CPD)—recovered several incriminating documents and records that necessitated the widening of the probe’s scanner to include all Covid-related contracts, said an ED official.

The agency has found records that allegedly revealed that the civic body had purchased a medication, Remdesivir, at a significantly higher rate than what the state government through the Directorate of Medical Education and Research (DMER) was paying for it. “The supplier offered the medication to the DMER for ₹3,200 but charged the BMC ₹4,100 for it,” said an ED officer.

The ED probe found that when the disparity in the rates and the need to renegotiate the contract was raised by some civic officials, a senior BMC official turned down the suggestion on the ground that there was no provision in the contract to re-negotiate. “The BMC could have sourced Remdesivir from DMER instead of spending more unnecessarily,” said an official. “There was a huge demand for the medication during the early stages of the pandemic.”

The agency is also examining allegations that several crore rupees were spent by the BMC to facilitate the stay of emergency personnel, including doctors and other health staff, around their places of work to deal effectively with the pandemic. “However, it appears that the expenses on the accommodation continued even when there was no need, when travel restrictions had been lifted,” an ED source said.

The probe revealed that the civic body had allegedly purchased body bags from a private firm for ₹6,800 per piece, inclusive of taxes—around 10 times more than what it had paid for bags to another private supplier. ED sources also claimed that Covid medicines provided to the BMC were 25 to 30 per cent costlier than in the open market.

ED sources on Friday said that the searches had also yielded a “diary” that contained entries, suggesting payments made to civic officials by suppliers/middlemen in lieu of favours related to the award of contracts. “The entries in the diary are coded and it will take time to crack all of them,” said an ED source.

The agency is also examining the role of up to five middlemen, some of whom had claimed to have political contacts, who allegedly liaised between Covid suppliers and the BMC. “It appears that these middlemen influenced some contract conditions to suit their favourite suppliers,” an ED official said. The agency has sealed the flat of one such person, and is verifying the antecedents, including the source of funding, of four flats in the name of another person who is suspected of having influenced the award of contracts.

The ED probe is related to an FIR lodged in August 2022 against the partners of Lifeline Hospital Management Services, contracted by the BMC to set up two jumbo Covid centres. According to the FIR, the company got the contract using allegedly forged documents and had no previous experience of providing manpower for any medical facility. The premises of Sujit Patkar, a partner in the firm, were searched on Wednesday.

According to the FIR, Lifeline was jointly probed by the Pune Municipal Corporation and Pune Metropolitan Region Development Authority (PMRDA) after a TV journalist died of Covid in the city in 2020. The PMRDA seized the firm’s security deposit of ₹25 lakh and issued a direction to blacklist it. Despite this, the BMC awarded the same company a contract worth ₹38 crore to provide services at two jumbo centres.

The agency has called in a few persons for questioning on Monday, including the then BMC additional municipal commissioner Sanjeev Jaiswal and Shiv Sena (UBT) functionary Suraj Chavan.