HYDERABAD: Lactulose Syrup (200ml), priced at Rs 74.20, was purchased by the Telangana ESI department for Rs 260 — a 350% price hike. Several emergency medicines were bought at exorbitant prices, in violation of the procurement procedures and the e-tender processes, causing a loss of Rs 200 crore to the department.
The details of the scam, unearthed by the Vigilance & Enforcement (V&E) wing of the State government in March, came to light on Tuesday unravelling the role ESI director Devika Rani played in siphoning money into benami firms, which claimed bills for Rs 200 crore without actually supplying the medicines.
The V&E wing has asked the labour department to take action against those involved. Six persons — Devika Rani, Dr Venkata Swamy, joint director (family welfare), Dr Asha Ramaiah, who worked as joint director (in-charge-family welfare), Dr K Vasantha Indira, assistant director stores (in-charge), K Nagalaxmi, pharmacist, and HR Aradhana Devi, also a pharmacist — have been named in the scam.
The inquiry revealed how the director floated as many as eight benami firms to supply drugs to the ESI in 2016-17 and 2017-18. Tenders were called for, but the information was communicated only to a few selected companies.
The indent order to supply medicines was communicated to these firms over the phone and the orders were sent by ordinary post. During the tender, in most cases, three quotations were accepted under ‘local purchase’, but on verification, all three were found to be from firms owned by a single family, and with very little variation in the price for supply of medicines.
The entire proceedings were to be initiated by the drug procurement committee, but this was not done. The inquiry also found that no committee was formed to analyse the requirement of drugs and medicines at the beginning of the year. Drug procurement committees were also not informed to assess the requirement of drugs and medicines. “It can be clearly understood that the director has deliberately kept aside the joint director. The tender scrutiny committee was not created by the director to identify the bidders through the pre-bid process,” the report noted.
Most of the benami firms were opened in 2015 and shut down after they supplied drugs to the ESI. The officials purchased drugs at a price of their will through local purchase, causing loss to the government.