KARACHI, Feb 19: The city government has moved a summary to the provincial government for reversal of "Rate Contract System" to procure medicines , which is estimated to cause Rs20 million loss to the health department of city government, well-placed sources said.

According to the summary, new medicine procurement policy "Rate Contract System" announced by the provincial government will cause losses of millions of rupees to the city government. Besides, it will also create serious financial and audit problems along with shortage of medicines at health facilities in Karachi.

Sources said that the Sindh health department had adopted the "Rate Contract System" for purchase of medicines for all the districts of Sindh so that medicines of common use could be procured in good quality with uniformity in rates.

But, the procurement of medicines by health department of city government during the year 2002-03 was at much lower rates as compared to other districts of the province.

Similarly, the rates received this year for the procurement of medicines are low on majority of items as compared to the rates supplied by the provincial health department under the Rate Contract System.

"Purchase of medicines under the new system through the provincial health department will be more expensive as compared to the purchase made locally by the city government," sources said, and added that common items like bandages, antiseptics, antibiotics and analgesics (pain killers), which were required in bulk, would cost more if purchased through the new system.

The summary stated that the annual budget of the city government health department for medicine procurement stood at Rs86,203,625 including Rs44,888,625 for Sindh government's institutions devolved in city government and Rs41,315,000 for the facilities of defunct district municipal corporation and district council.

The city government would have to spend an additional amount of Rs20,943,715 on the total purchase if provincial department procured the medicines under the new contract system, it added.

Sources said that the city government health department had very meagre budget for the procurement of medicines. Having more than 300 health facilities, it would not be possible for the city government to provide medicines of common use to the poor population under the new procedure.

Financial losses to the city government under the new procurement policy include Rs20 million on account of medicine purchase, Rs500,000 on sale of tender documents and Rs8,620,362 on security deposits collected from the bidders.

They said that new policy could create serious audit objections as all the contracts would be awarded by the provincial health department, while the payments would be made by the city government.

"The list of medicines to be procured by Sindh health department under the new system has been prepared without consulting the city government health department and without considering the medicines required by the city government health department," they said.

Sources lamented that despite the clear cut boundaries regarding administrative and financial authority of the provincial and district governments under SLGO 2001, undue interference was being made in city government affairs. -PPI