Andhra Pradesh govt finds massive profiteering in COVID-19 rapid test kits

KEY HIGHLIGHTS

• Attempt to overcharge Andhra Pradesh government on South Korean rapid test kit
• Hyderabad-based supplier told will get only lower price quoted for same product in Chhattisgarh government tender
• To pay Rs 337 per test instead of original quote of Rs 730
• Second instance as Delhi High Court slashed price of rapid test kit of a Chinese company by 33 per cent

Andhra Pradesh government cut the price of the rapid test kit it had ordered from a South Korean company by almost 50 per cent, a week before Delhi High Court slashed the price of a rapid test kit for novel coronavirus imported from China to be supplied to Indian Council of Medical Research (ICMR) by 33 per cent.

While it was a dispute between the importer and the distributor that helped the Delhi High Court find the huge trade margin that existed between the import price and the price billed to ICMR, the Andhra government's action was triggered by the huge difference in the price quoted by the an authorised agency to them and the price the manufacturer had directly quoted to the Chhattisgarh government for a similar supply tender. Both instances point to attempt of large scale profiteering by the local suppliers of imported test kits in the country.

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On April 18, Andhra Pradesh Medical Services and Infrastructure Development Corporation shot a letter to Sandor Medicaids Pvt Ltd, the local company that had bagged a tender to supply 2 lakh rapid test kits manufactured by South Korean firm SD Biosensors at a price of Rs 730 per kit, that the state government will pay only Rs 337 for each kits to the company. The procurement agency's action was based on the information that the Indian arm of the Korean firm - SD Biosensor Healthcare Pvt Ltd - had directly quoted the reduced amount to Chhattisgarh Medical Services Corporation Ltd for a similar purchase tender for that state two days ago.

The purchase order issued by Andhra Pradesh government had stipulated that if any instance comes to the notice of the authority that the same items are supplied at a lower price than what has been quoted by the company to other government agencies, the differential amount will be recovered from the bills due. The letter informed that the payment will hence be made at the price quoted for the Chhattisgarh government. It also asked the company to explain the reasons for quoting more than other government suppliers.

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The Delhi High Court case involved the rapid test kits manufactured by Wondfo Biotech, China. While the landing cost of the kit was Rs 245 a piece, ICMR's purchase price was Rs 600. The Court ordered the price to be not more than Rs 400 per test, bringing the cost down by 33 per cent.