Opposition parties want the government to answer why the New GPC continues to benefit from a cabinet decision, which precludes that company from going to tender for the provision of drugs and other supplies to the Ministry of Health.
The matter was raised by Opposition Members of Parliament during a recent sitting of the Public Accounts Committee (PAC).
Contacted on the statements, Minister of Health Dr Leslie Ramsammy said he is not aware that the ministry is in contravention of any laws.
David Patterson of the Alliance For Change (AFC) pointed out, ”Government via a cabinet decision made in 1997 – instructed the Ministry of Health to make all local purchases from New GPC, so for 11 years there have been no public tendering for drugs to be supplied to this ministry, this contravenes the public procurement act”.
Patterson, a member of the PAC, said, “This cabinet decision has not been reviewed or updated since then, however it is questionable if cabinet has the authority to overrule an act at all, or for such an extended period [with] 11 years and three general elections.”
He said that in 2005 this contract with GPC was worth approximately $600 million.
“What is worse is their payment methodology. The ministry pays New GPC 100 per cent of the contract at signing,” he said.
PNCR-1G Member of Parliament and former chairman of the PAC, Winston Murray also expressed similar sentiments on the arrangement between the New GPC and the Ministry of Health.
Patterson explained that the New GPC is required to provide a six-month bond to cover the payment but that the cost for this bond is generally minimal.
“So what is happening in effect is that GPC is on a cash cow, they have to expend little in way of finance and have a guaranteed source of finance”, he argued.
The report of the Auditor General for 2004 had made a recommendation that the Ministry of Health advertise internationally every three years for the supply of drugs and medical supplies and pre-qualify suppliers.
The Auditor General’s report for 2005 said that in relation to purchases exceeding $600,000, 21 purchases valued at $174.914 million were made from specialised agencies overseas on an approval, which had been granted by cabinet in 1997. “It could not be determined whether cabinet had authorised an extension for such approval to be used beyond that year,” the Auditor General said in his report of 2005.
The report pointed out that some of these purchases were based on an approval that cabinet granted in 2003. “Since such approval would have lapsed in that year it did appear that purchases valued at $527.980 million had not satisfied the condition set out in the Procurement Act 2003 and related legislation,” the Auditor General’s report for 2005 said.
In the same report, the Auditor General recommended that the Ministry of Health ensure that where Cabinet and/or other adjudicating levels had given authority in a financial year for the execution of transactions, approvals should be sought for the continuance of the authority if it becomes necessary to finalise the transactions initiated in a subsequent financial period. “If, however, new transactions are undertaken, separate approvals should be sought in compliance with the Procurement Act of 2003 and related regulations,” the 2005 report said.
The Auditor General stated that the ministry should advertise in at least one publication of wide international circulation for the supply of drugs and medical supplies.
Though the National Procurement and Tender Administration Board is in place, the Public Procurement Commission (PPC) and its tribunal are still to be set up despite years of wrangling between the government and the opposition. One of the primary envisaged functions of the PPC is to “monitor and review the functioning of all public procurement systems to ensure that they are in accordance with law and such policy guidelines as may be determined by the National Assembly”.
QAII
Patterson also commented on the Queens Atlantic Investment Inc (QAII), the parent company of the New GPC, stating that Go-Invest and the Privatisation Unit contravened the law and then attacked the private sector for speaking out on it.
“If the process had been open and transparent, all of the issues would have come out,” he said.
“State assets and concessions being given out must be done in a transparent manner… we don’t know if any other company would have offered innovative new investments and products.”
Patterson is also of the view that the price fixed by government for the sale after three years of the Sanata Complex for $700 million is not acceptable and feels that if the sale had been advertised, there would have been many interested persons and companies coming forward.
