How a Chhattisgarh minister’s tweet could save Andhra govt millions of rupees
The Andhra Pradesh government could save over Rs 78 million if it is able to get the company to match Chhattisgarh’s dealUpdated: Apr 21, 2020 00:59 IST
A tweet by the Chhattisgarh health minister TS Singh Deo declaring that his state had purchased 75,000 rapid testing kits from a South Korean firm has sparked off a huge row in Andhra Pradesh after it turned out that the state government had paid twice as much for the testing kits than its neighour.
Furious, the Andhra Pradesh government which had placed the order on April 7, has told the company to match Chhattisgarh’s price.
If Andhra does get the same price, it could end up saving Rs 78 million.
Andhra Pradesh had placed an order with the supplier, SD Biosensors Pvt Ltd, Korea, for two lakh rapid test kits. According to this deal, the government would pay Rs 730 per kit excluding GST. For 2 lakh kits, it comes to about Rs 146 million.
When the first consignment of one lakh kits reached the state government via a special Air India flight on Friday, there were photo-ops at Andhra Pradesh chief minister YS Jagan Mohan Reddy’s camp office. He received the first testing kit, and even had himself tested.
One lakh #Covid19 rapid test kits imported from South Korea in a special flight, were launched by Hon'ble Chief Minister @ysjagan at the camp office in Tadepalli, today. These test kits give results within 10 minutes & are expected to ramp-up testing in Andhra Pradesh.#Covid_19 pic.twitter.com/4LplO3de2k— CMO Andhra Pradesh (@AndhraPradeshCM) April 17, 2020
“These test kits give results within 10 minutes and are expected to ramp-up testing in Andhra Pradesh,” the chief minister’s office tweeted soon after along with a couple of photographs.
The uproar in Andhra Pradesh came the next day when Chhattisgarh health minister TS Singh Deo tweeted that his government was procuring 75,000 high quality rapid testing kits at Rs 337 excluding GST.
“The rate we have been able to close at is the lowest in India,” he said. The minister credited the South Korean Ambassador in India Shin Bong-Kil, the Indian Ambassador in Seoul Sripriya Ranganathan and the central government for help in closing the deal.
We are procuring 75,000 high quality rapid testing kits at a benchmark price of ₹337 + GST from a South Korean company based in India, which has proven to be the lowest bidder. The rate we have been able to close at is the lowest in India. (1/2)— TS Singh Deo (@TS_SinghDeo) April 17, 2020
Andhra Pradesh’s opposition Telugu Desam Party quickly rushed to allege a scram.
“How could we pay Rs 730 for the same test kit which the Chhattisgarh government had bought for Rs 337? Can you please explain, whether it is called commission or third-party payment or J-tax (Jagan tax)?” asked senior TDP legislator Gorantla Buchaiah Chowdary.
Andhra Pradesh Medical Infrastructure Development Corporation Ltd managing director V Vijaya Rama Raju promptly served notice on th South Korean company’s local dealer Sandor Medicaids for the huge price difference.
In his notice, the state-run firm underscored the contract conditions that empowered the government to recover the price differential “if any instance comes to the notice of the government that the above medical items are supplied at a lower price than price quoted now”.
“As such it is informed that, the payment will be made as per the Chhattisgarh Medical Services Corporation Limited rate of Rs.337 per each kit excluding GST for the supplies made to the Government of Andhra Pradesh,” the notice said.
Deputy chief minister and health minister Alla Kali Krishna Srinivas insisted that the state had been transparent about the entire deal. “The purchase was made from the lowest bidder and the entire transaction was done according to the guidelines framed by the Centre, he said.
Health commissioner K Bhaskar suggested that it was possible that the price difference could be linked to the fact that Andhra imported the rapid test kits directly from South Korea, while Chhattisgarh bought them from the local franchise of the South Korean company
“When we had placed an order, the Korean company’s Indian unit did not have the permission from ICMR to supply rapid test kits,” he said, adding that in the coming days, the price of rapid test kits could come down to even Rs 50 per kit.
Chief Minister Jagan Mohan Reddy reviewed the action taken at a meeting on Monday and complimented officials for moving swiftly to save public funds, a state government official said.