The Commission for the Investigation of Abuse of Authority filed a corruption case in the Special Court on Sunday against 13 then officials of the Department of Health Services and the head of an equipment supplier company, imposing a fine of Rs 146.85 million each.
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A case has been filed against 14 people, including Dr. Sangita Kaushal Mishra, the outgoing Additional Secretary of the Ministry of Health and Population, on charges of corruption in the procurement of health equipment.
The Commission for the Investigation of Abuse of Authority (CIAA) filed a corruption case in a special court on Sunday against 13 then officials of the Department of Health Services and the head of an equipment supplier company, setting a fine of Rs 146.85 million each.
Dr. Mishra was set to become the Health Minister in the interim government formed under the leadership of former Chief Justice Sushila Karki in the wake of the Gen-G rebellion. She resigned from her position as Additional Secretary after it was decided that she would become a minister. Prime Minister Karki had sent a letter to the President's Office on 20 October recommending Dr. Mishra as the Health Minister. However, Mishra's appointment was stopped after the CIAA informed Prime Minister Karki that an investigation was underway for alleged irregularities in the procurement of equipment while he was the Director General of the Department of Health Services.
According to CIAA spokesperson Rajendra Kumar Poudel, a case has been filed against Dr. Mishra, the then Director of the Department's Management Division, Dr. Shravan Kumar Thapa, Head of the Supply Management Branch, Dr. Surendra Kumar Chaurasia, and Director of the Department, Dr. Vivek Kumar Lal.
The Authority has also filed a case against the then Chief Controller of Accounts Bhuwan Prasad Kafle, the department's legal officer Sita Ghimire, senior public health officer Deepak Adhikari, the then branch officer Yadav Prasad Sapkota, the then accounts officer Shambhu Prasad Dhakal, and accountant Tilakram Dhakal.
The department's biomedical engineers Ashish Chauhan and Padma Mishra, the department's central store Pathlaiya Bara Public Health Inspector Sanjay Kumar Sah, and the head of supply company Maxim Incorporation Traders Pvt. Ltd. Sundar Bhusal have also been made defendants. The Authority has demanded that all those made defendants be fined Rs 146.85 million each and recover the embezzled amount and be sentenced to imprisonment.
The Authority had investigated them after a complaint was filed against them for colluding in the purchase of mammography and other equipment for the department in the fiscal year 2080/81 and causing damage to government property. The Authority has stated that corruption was committed by colluding with the contractor company to obtain all the materials as per the terms of the contract while preparing the cost estimate, and by making the contractor company prepare false reports and other documents with malicious intent and pay them.
The Authority's charge sheet also states that although three companies were put in competition during the procurement of the equipment, the contract was given to Maxim in collusion. "During the procurement process, technical specifications were prepared mentioning 12 points including mammography machine, its accessories, training, etc. in violation of prevailing laws including the Public Procurement Act, 2063 BS and the Public Procurement Regulations, 2064 BS," the Authority has stated that the contract process was proceeded with with malicious intent without/without approval from the authorized officer.
Maxim Incorporation Traders Pvt. Ltd., of which Sundar Bhusal is the founding director, as well as Shubh Bio Medical Concern Pvt. Ltd. and Vive Biomedical Concern were put in competition for the procurement of the equipment. According to the Authority, the companies did not submit separate rates for each title as per the technical 'specifications'. The cost estimate was prepared based on the lump sum price rate submitted by Shubh Bio Medical Concern Pvt. Ltd. The total cost estimate, including VAT and other expenses, was approved at Rs 144.375 crore. The Authority has stated that the defendants colluded right from the stage of preparing the cost estimate for the contract. The Authority argues that Shubh Bio, whose operator is Bhusal, was included in the tender as a separate competing company, which was a game to get the contract through collusion. The Authority has mentioned in the charge sheet that although the department prepared a cost estimate of Rs 127.5 million excluding VAT for the purchase of equipment, the contract was awarded to Maxim for Rs 125.5 million in collusion. The charge sheet states, ‘Since the bid submitted by the defendants was selected as per the plan agreed upon between them with a very small difference from the estimated cost, it is clear that there was collusion in the procurement process from the very beginning.’
To prepare the bid cost estimate, a bid evaluation committee was formed under the chairmanship of Dr. Shravan Kumar Thapa with Bhuwan Prasad Kafle and Sita Ghimire as members and Surendra Prasad Chaurasia as member secretary. After that, Maxim, one of the applicants, was selected as the substantially effective bidder. After that, on 24 Jestha 2081, the department signed an equipment purchase agreement with the supplier company. Whereas, a month before the contract agreement was signed, on 26 Baisakh, it was found that the manufacturing company ‘General Medical Merit’ of Italy had sent a letter to Maxim Incorporated to open a letter of credit for the purchase of equipment. This confirmed that collusion had taken place before the contract was signed, according to an officer involved in the investigation.
The charge sheet filed in the special court states, ‘Before the contract was signed, the bidder was asked to obtain information from the defendants regarding the technical evaluation, cost estimate, etc., which were confidential details related to the bid. The fact that the bidder Maxim submitted the bid and was selected for the contract further confirmed the fact that the defendants were in collusion in the purchase.’
The Italian company had fixed the price of 5 equipment at 450,000 rupees at the rate of 90,000 euros per unit, and accordingly, Maxim had fixed the cost estimate at 127,000,000 rupees, when the price of the equipment was only 68,577,342 rupees from the then 450,000 euros, the charge sheet states. The equipment was brought in two phases. According to the CIAA, it has also been found that the materials supplied in the first phase on 23 Ashad 2081 were supplied as per the contract by accepting wrongdoings and making reports on the basis of false invoices and false reports, thereby causing loss and damage to government property. The capacity and weight have also been found to have been reduced without complying with the prerequisites.
‘Since it was found that the supplier imported the goods as per the agreement at a price of Rs 67,019 including customs duty and value added tax, it has been established that the defendants, with the malicious intent of making illegal profit and causing/causing illegal loss to the government/public institution/health service department, made a profit of about Rs 63 million 7,980 after deducting value added tax and other expenses, and prepared/caused an unnatural cost estimate with the malicious intent of making/giving benefits to the public servant defendants from the same amount,’ the charge sheet states.
Dr. Mishra entered the health service in 2057 BS. But she left in the middle. Later, she returned to the government service through open competition in 2070 BS. She became the head of Koshi Hospital and Paropkar Maternity and Gynecology Hospital. She was the Director General of the Health Service Department for about a year from 13 Bhadra 2080. Recently, she was Additional Secretary in the Ministry of Health.
