Company With No Ventilator Model Got Rs 373 Cr PM CARES Order To Make 10,000 Ventilators

 Huffpost

September 24, 2020

By:Samarth Bansal & Aman Sethi

Trivitron Healthcare told HuffPost India that they began designing the ventilator and procuring the components only after they were given the contract.

In early April, Trivitron Healthcare, a 23-year old Chennai-based medical technology company, got government orders to build 7,000 “basic” and 3,000 “advanced” ventilators, paid for from the PM CARES fund. But when Trivitron got the order, neither of their basic nor advanced ventilator models existed—not even working prototypes.

The total value of Trivitron’s order works out to Rs 373 crore, based on a simple cost-per-unit calculation including Goods and Services Tax.

The “advanced” model was priced at Rs 8,56,800, five times the “basic” model which was priced at Rs 1,66,376, information accessed through RTI requests filed by transparency activist Venkatesh Nayak have revealed. 

These prices for Trivitron models – which were yet to be developed at the time — were based on the costs submitted by its competitors: the cost of the basic model is exactly the same as a competitor product by AgVa; while the advanced model was Rs 8,56,800, just Rs 5,600 cheaper than the bid submitted by Allied Medical Limited. (Prices are inclusive of GST)

But the tender documents contained only one set of qualifying technical specifications, and no stated provisions for procuring two different types of ventilators at such vastly different prices. The tender was issued by HLL Lifecare Limited, a public sector enterprise tasked with procuring Covid-19-related supplies, including ventilators, for the Narendra Modi government.

Trivitron’s order did not come from HLL. It came from Andhra Pradesh Medtech Zone (AMTZ), a public sector enterprise under the government of AP, which has a 270-acre zone dedicated for medical device manufacturing. HLL gave AMTZ an order to manufacture 13,500 ventilators and AMTZ passed on 10,000 of these to Trivitron. Trivitron told HuffPost India that they got the orders when they responded to a request for procurement put out by AMTZ, at prices set by AMTZ.

Five months later, this opaque two-step contracting process between HLL and AMTZ has unravelled into a shambles even as Trivitron, the private company, says they are stuck in the middle bearing the consequences.

Trivitron told HuffPost India that they have manufactured the ventilators at great cost and effort in the midst of a pandemic, but HLL is yet to issue them a dispatch order for their ventilators. As a consequence, Trivitron has not supplied a single ventilator that they say they developed specially for this contract.

“Immediately after we received the order, we started the process of procuring the components and simultaneously designing a ventilator to meet specs given by HLL,” said Satyaki Banerjee, Trivitron’s co-CEO.

“Despite huge exposure of our investments into this project, we have no certainty of supplies, despite following everything which was mentioned in our P.O. given by AMTZ endorsed by HLL,” Banerjee said in an email. “We do hope better sense prevails and a fair and transparent procedure is followed by the Tendering authority and DGHS [Directorate General of Health Services] and they fulfil the purchase order given to us.”

The strange case of how Trivitron, a company that had never made a ventilator before, won an emergency government contract to make 10,000 ventilators and is now still to receive a delivery dispatch, is illustrative of the Modi government’s opaque, arbitrary and misguided attempts at procuring 58,850 ventilators for a total cost of around Rs 2,000 crore from the PM CARES fund. While defence public sector enterprise Bharat Electronics Limited was directly tasked with making 30,000 ventilators, procurement for the remaining orders was handled by HLL.