Saturday, July 4, 2020

Ministry and suppliers in COVID-19 price fixing collusion

The embattled Ministry of Health and Wellness last week prejudiced Directorate on Corruption and Economic Crime (DCEC)’s ongoing investigations into allegations of corruption in the award of tenders for the supply of COVID-19 medical equipment. While DCEC investigations are still at an early stage, the ministry issued a press statement last week dismissing reports of wrong doing in the award of the tenders. Fresh information has however emerged that government officials colluded with suppliers to fix prices of COVID-19 medical equipment.

It was initially reported to the DCEC that tenderpreneurs took advantage of the COVID-19 panic to pad prices of medical equipment.It has however emerged that ministry officials colluded with suppliers to inflate prices of COVID-19 medical equipment. A South African company that was approached by Botswana government officials to supply COVID-19 equipment has spilled the beans on how the officials colluded with suppliers on pricing. The government officials inflated the tender budget of COVID-19 medical equipment and then advised the suppliers on how much to quote for the tender.This ensured that the suppliers raked in huge profits while still pricing below the government’s tender budget (see main story).Sunday Standard can reveal that Mileage Group and Pula Rich which form part of the DCEC investigations were among companies approached by government officials to provide quotations for the supply of COVID-19 medical equipment. The Sunday Standard could not establish if like the other suppliers, the two companies were advised on how much to quote.

In an interview with the Sunday Standard, Mileage Group’s Managing Director Miles Nan said “the government chose us to supply the testing kits because our quotations were reasonable.” While the Mileage Group has a track record of supplying government with medical equipment, Sunday Standard can reveal that Pula Rich had never done business with government and was still in the process of incorporation.Two other Botswana companies Deltamore Holdings and Protech which were also hand picked to supply COVID-19 Personal Protective Equipment have failed to honour the tender. The two companies are currently locked in a legal dispute with their South African supplier, Proverbs Medical.

The South African company is being investigated by the National Prosecuting Authority under the Prevention of Organised Crime Act.While government shifted blame for the late delivery of COVID-19 medical equipment, it has emerged that the ministry was to blame. Although it was initially reported that government commissioned Pula Rich and Mileage Group to supply test kits in January this year, it has since emerged that the Ministry of Health sent email messages to the suppliers among them Mileage Group and Pula Rich on April 23rd 2020 requesting for quotations for the supply of medical equipment.The request for quotations was made after the plan by the COVID-19 Task Force to conduct community testing, parallel to the contact trace testing had collapsed because there were not enough test kits.The Covid-19 Task Force had initially planned to commence community testing for COVID-19 by April 20th.

Former Deputy Permanent Secretary in the Ministry of Health and Wellness Moses Keetile and Director of Health Services, Dr Malaki Tshipayagae, issued statements mind April that they have collaborated with the University of Botswana, National Strategy Office, Statistics Botswana and Botswana-Harvard Partnership to conduct the tests.The testing which were to be done at selected households in greater Gaborone, greater Francistown, Gantsi, Ngamiland and Chobe areas were scheduled to run for 14 days. A total of 20,000 tests were to be done. Unconfirmed report revealed that the 20 000 test which were scheduled for 14 days were planned around the 20 000 testing kits which had been donated by the Jack Ma Foundation and Alibaba Foundation. The plan however meant there would be no testing kits to do contact trace testing. Hardly a week after Keetile and Tshipayagae, issued statements that the COVID-19 Task Force would conduct community testing and contact trace testing concurrently, Coordinator of the COVID-19 Task Force announced a new and revised plan at a press conference.

He explained that due to limited resources, they were unable to do community testing.The test kits from Mileage Group were supplied to government on May 21, 2020 and the rest is still to be delivered. While Mileage Group’s MD Miles Nan explained that “the late delivery was because of huge medical equipment backlog in China.” It further emerged that contrary to reports made to the DCEC that Mileage Group does not have a tax clearance certificate, the Sunday Standard has been able to establish that the company is tax compliant and in good standing.

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Sunday Standard June 28 – 4 July

Digital copy of Sunday Standard issue of June 28 - 4 July, 2020.