No Payment, Lives Lost: 6,300 ‘PM CARES’ Ventilators Not Delivered

Exclusive | Where are the 50,000 ‘made in India’ ventilators promised by PM CARES Fund?

While India is choking due to COVID-19 2nd surge, red-tape and non-payment have delayed delivery of life-saving medical equipment, including 9.5K LFO ventilators, that were funded by PM CARES Fund.

(Image: Kamran Akhter/The Quint)

The PM CARES Fund had allocated Rs 2000 crore for the “supply of 50,000 ‘made in India’ ventilators to government hospitals run by Centre/State/UTs.” This information was made public in May 2020.

But The Quint has learnt that of these 50,000 ventilators, the delivery of almost 9,000 Low Flow Oxygen (LFO) ventilators has been held up due to non-payment of dues to the designated manufacturer. In this case, a Chennai-based company called Trivitron Healthcare.

Red tape prevented these life-saving ventilators from reaching hospitals, where they could have saved thousands of lives.

Tragically, this has happened even as the number of active COVID cases are at an all time high, due to the second wave of the pandemic, severely testing India’s health infrastructure.

Due to hospitals being overwhelmed by shortages of medicines, oxygen and ventilators, the number of COVID deaths too have soared, to almost 4,000 a day.

This raises some pertinent questions: A full year on, where are these crucial 9,000 ventilators that were promised by the PM CARES Fund? Why haven’t they reached India’s hospitals? Who is to blame? Why isn’t PM CARES keeping track of such a key project that it has funded?

Hundreds of Right to Information Act (RTI) queries were filed with PM CARES in the last one year. But PM CARES has not responded, claiming it is not a ‘public authority’, and hence, it does not come under the purview of the RTI Act.

The Quint has, therefore, carried out its investigation based on information available in the public domain.

(Image: Arnica Kala/The Quint)

The Procurement Trail

Before we move ahead, let’s understand the 'procurement trail' for the 50,000 ventilators announced by PM CARES in May 2020.

Multiple media reports say that PM CARES had allocated Rs 2,000 crore to the Ministry of Health and Family Welfare (MoHF), for the procurement of 50,000 ventilators. The MoHF further engaged HLL Lifecare Limited to focus on the ventilator project. HLL parcelled out the contracts for the manufacture of the ventilators to multiple private companies and Public Sector Units (PSUs).

One of the PSUs was Andhra Pradesh Medtech Zone Ltd (AMTZ).

Most of the contracts between the government, vendors and the manufacturers were signed in April 2020.

Order Placed But No Payment to Trivitron

(Image: Erum Gour/The Quint)

In this article, we are focusing on the procurement of 9,500 Low Flow Oxygen (LFO) ventilators by AMTZ.

Experts we spoke to say that low-cost LFO ventilators are useful in medical emergencies, and can provide relief if high-end ventilators are occupied with more critical patients. Doctors say that for less severe lung damage, LFOs can be equally important life-saving equipment.

Media reports say that Trivitron Healthcare, a 23-year-old Chennai-based medical technology company, is one of the companies that received an order for LFO ventilators from Andhra Pradesh’s Medtech Zone Ltd.

The Quint wrote to Trivitron Healthcare to find out how many ventilators they supplied to government hospitals, via AMTZ, after receiving their first order in April 2020.

We found that Trivitron Healthcare received an order for 7,000 LFO ventilators, of which it has supplied ONLY 650 to government hospitals through AMTZ.

Trivitron told The Quint in its reply on 21 April 2021 that they got an order worth Rs 104 crore from AMTZ as the price of an LFO ventilator was fixed at Rs 1,48,500 per unit. Trivitron got the purchase order in two tranches – the first tranche was for 2,000 ventilators, received in April 2020. The second tranche was for 5,000 ventilators.

Though they received the order in April 2020, it took Trivitron eight months to develop a ventilator “meeting the final specification given by the health ministry.” Their ventilator model was approved on 22 December 2020 by National Accreditation Board for Testing and Calibration Laboratories or NABL.

Trivitron, explaining the reason behind the delay in approval, said:

“At the time of receiving the order (April 2020), Trivitron had multiple prototypes ready which were further optimised to meet the price (Rs 1,48,550 per unit) and technical specifications floated by relevant authorities. The selected prototype of the model was approved by the Ministry of Health’s Technical Committee in July 2020, and thereafter the ventilator was subjected to extensive clinical trials across multiple government hospitals and also IEC testing at NABL accredited labs which led to the final approval in December 2020.”

Trivitron Healthcare’s response

Huge Delay in Prototype & Clinical Approval by Govt

(Image: Erum Gour/The Quint)

So, according to Trivitron, the health ministry took three months to approve its prototype, and then it took NABL another five months to conduct the clinical trials.

But experts The Quint spoke to say that clinical evaluation of such medical equipment generally takes just one month.

“Five months for clinical evaluation is quite excessive, especially for a medical device that’s supposedly urgently needed to address emergency needs during a pandemic.”

Rajiv Nath, Forum Coordinator Association of Indian Medical Device Industry (AiMeD)

Nath further added that "as the COVID cases started dropping in August-September 2020, the government possibly realised that they have ordered too many ventilators and could manage with other alternative 1st line oxygen therapies."

“Government seemingly dragged the process of clinical evaluation to delay procurement and payments which wasn’t fair on the manufacturers who had already invested in the inventory of components needed for the urgent, time bound deliveries that were initially highlighted.”

Rajiv Nath, Forum Coordinator Association of Indian Medical Device Industry (AiMeD)

Nath also said that the government should have expedited the process of ramping up clinical evaluation in emergency mode, just like they did for COVID vaccines.

No Advance Payment for 5000 Ventilators

Trivitron claims to have started manufacturing the LFO ventilators right after the approval, but have so far managed to supply only 400 out of 2,000 units from the first tranche.

For the remaining 1,600 units of the first tranche, the company says, “it would be supplied in April-May 2021 as per the dispatch instructions being received from relevant authorities.”

Just before publishing the article, The Quint once again checked with the company on 5 May 2021 about the dispatch of ventilators.

In response, they said:

"Between 21 April and 5 May, additional 250 LFO ventilators were supplied to the government hospitals, making a total of 650 ventilators so far."

But, most crucially, Trivitron says they still haven’t received the advance payment for the second tranche of 5,000 ventilators. This means the company cannot start the production of those ventilators, let alone supply them.

The Quint asked Trivitron Healthcare to share names of the government hospitals that have received the 400 ventilators from them. But the company refused to share details on grounds of confidentiality.

Five Other Firms Contracted, Delivery Status Unknown

The Quint has written to AMTZ, HLL Lifecare Limited, and to the health ministry to find out when will they release the advance payment for next lot of 5,000 LFO ventilators.

We also asked about the possible reasons behind the delay. But we have got no response so far.

HLL gave an order for 9,500 ventilators at a price of Rs 1,48,550 per unit to AMTZ. Of which, a purchase order of 7,000 ventilators went to Trivitron Healthcare and the rest to other companies.

Since PM CARES refused to share any information under RTI, transparency activists filed RTI queries with other public authorities like HLL and the health ministry, to access additional information.

An RTI reply received by transparency activist Venkatesh Nayak in September 2020 reveals the names of other manufacturers that received orders from HLL Lifecare Ltd. They are:

• Allied Medical Ltd received an order for 350 ventilators at the price of Rs 7.7 (approx) lakh per unit.
• AgVa Healthcare received an order for 10,000 ventilators at the price of Rs 1.4 lakh (approx) per unit.
• Wipro GE Healthcare received an order for 100 ventilators at the price of Rs 12.4 lakh (approx) per unit.
• BPL Medical Technologies received an order for 13 ventilators at the price of Rs 12.7 lakh (approx) per unit.
• Jyoti CNC Automation Ltd received an order for 5,000 ventilators at the price of Rs 2.1 lakh (approx) per unit.
• AMTZ received an order for 9,500 ventilators at the price of Rs 1.4 lakh (approx) per unit.

The RTI further reveals that HLL made advance payments of Rs 41.59 crore to AgVa Healthcare in September 2020.

Similarly, Allied Medical received Rs 27 crore and BPL Medical Technologies was paid Rs 1.71 crore against ventilator supplies.

The Quint has written to these manufacturer seeking information on how many ventilators they have supplied to government hospitals so far. We will publish a follow up article as and when we gather more information.

Bharat Electronics Limited (BEL), a public sector enterprise under the Ministry of Defence, was directly contracted by the health ministry to manufacture 30,000 ventilators. BEL had supplied 24,332 ventilators by September 2020.

PM CARES Fund Remains Opaque

The PM CARES Fund is run directly by the Prime Minister’s Office (PMO). So, we have sent the following questions to the PMO as well:

• How many ventilators have been supplied to government-run hospitals under the PM CARES Fund?
• Could the PMO share the names of government hospitals that have received ventilators?
• How many ventilators have been procured by PM CARES Fund under the allocated sum of Rs 2000 crore?
• Is the PMO tracking the production and delivery of ventilators by the various vendors?
• Is the PMO aware of the delay in payment leading to delay in supply of ventilators?
• Does the PMO have a progress report on the delivery of ventilators from the health ministry?

But we have not received any response so far.

The PMO claims that the PM CARES Fund is not a ‘public authority’ but one cannot deny that it is the public that has donated money to PM CARES, with the hope that it will be utilised to serve people in the time of need.

Lack of transparency and opacity in RTI replies from PM CARES, and the PMO, makes the whole ventilator procurement process a big puzzle.

But from what The Quint has found out about the delivery – of just 650 LFO ventilators from a total of 7,000 in over a year, it clearly exposes the apathy, lack of accountability, and lack of urgency in delivering life-saving medical equipment to the people.

There is no doubt that this has cost lives of many Indian citizens. The time and funds were there, but the job was just not done in time.

The Quint has published a series of articles reasoning why PM CARES Fund should be under RTI. The unpreparedness the government in the face of the second COVID wave stands exposed.

The Quint will continue to enquire why the PMO does not want the PM CARES Fund under RTI, along with its investigation into PM CARES' fund allocation for crucial COVID-19 needs.