Karnataka government bore freight and transport charges of PPE kits despite companies initially quoting it, says report 

A file photo of a health worker at a COVID-19 testing camp at K.R. Market bus stand in Bengaluru.
| Photo Credit:
K. Murali Kumar

The initial quotes by the two firms that bagged the order for 3 lakh PPE kits — DHB Global Hong Kong (China) and Big Pharmaceuticals — included freight and transportation charges. But a corrigendum was issued days later, changing the nature of the contract leading to the Karnataka government bearing the freight and transportation charges, which resulted in undue benefit to the suppliers to an extent of ₹14.21 crore, the John Michael D’Cunha Commission report on alleged irregularities during COVID-19 noted. 

At whose instance?

“It is not known at whose instance the above corrigendum came to be issued. Nonetheless, by this corrigendum, not only the fundamental terms of the contract were altered with regard to the specifications of the equipment, but also the terms of transportation were changed to the detriment of the procuring entity. By altering the contract, the procuring entity is seen to have agreed to bear the additional transportation fee from the point in the delivery of the shipment such as the cost of shipping, packaging charges and the cost of transportation from freight station to the Warehouse,” the report said. 

The corrigendum and the consequent payment of freight and transportation charges, the report notes,“ was wholly arbitrary, malafide, without authority of law and was intended to confer undue advantage to the suppliers to the extent of ₹14.21 crore.” It recommends disciplinary action against officials concerned.

‘Criminal misconduct’

It also said the act of not only approving the contract but also the subsequent corrigendum by the then Chief Minister and the then Health Minister “amounts to criminal misconduct” under The Prevention of Corruption Act, 1988.