‘Commission agents’ cash in on billion-rupee bid to supply medical gloves to govt. hospitals -Industry players express concern

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BY SURESH PERERA-April 7, 2018, 10:31 pm 

A one billion rupee tender floated for the supply of surgical and examination gloves to government hospitals has raised concern amongst industry players over allegations that ‘commission agents’ acting as ‘third parties’ have found favor despite a Cabinet decision that procurements should be made directly only from local manufacturers.

"This is atrocious as a pair of gloves purchased from manufacturers at Rs. 28/50 is supplied to the Health Ministry at around Rs. 40/-," they asserted.

This translates into a profit margin of Rs. 11/50 per pair when the average markup a direct manufacturer would maintain is around three to four rupees per pair, they noted.

With millions of pairs of gloves procured through bids from time to time, there are big bucks involved due to the hefty profits on consignments, they said.

The accepted procedure in terms of the government determination is to restrict bids strictly to Sri Lankan maunfacturers to secure fair pricing, coupled with encouraging local industries, but the situation has boiled down to doubling the margins of ‘commission agents’, industry souces charged.

A certain supplier who acts as a ‘third party’ has bulldozed his way in an attempt to take the cake on the basis of a close rapport as a "classmate" of a senior health official, they claimed. "Instead of opting for local preferences to ensure a more competitive pricing structure, what we see now is unacceptable third party involvement in bids".

The government stepped in earlier to halt the import of gloves to make a substantial saving by resorting to local purchases, but the way ‘commission agents’ are now allowed to run the show, imports are more cost effective, they pointed out.

Secretary to the Health Ministry, Janaka Sugathadasa, was unavailable for comment. However, a senior official acknowledged that there are a "lot of issues".

Asked about ‘commission agents’ staking a claim notwithstanding mandatory provision only for direct procurements through bids from local manufacturers, he declined comment on specific issues, but admitted that "things were not progressing the way they should".

Health Minister, Dr. Rajitha Senaratne has insisted that local manufacturers of gloves be given exclusive preference in procurements in adherence with the Cabinet decision, but apparently pressure exerted from various quarters has made steering the process more difficult, officials said.

The Health Minister is trying to drive some sense into the whole process, but external interference has turned out to be a force to reckon with, they asserted.

In this backdrop, industry players have sought fresh bidding on the tender, which has now been floated, to ensure a level playing field.

"We are keeping our fingers crossed that the Minister will intervene to be just by all genuine direct manufacturers, industry officials said.