Multinational blacklisted for violating Mayo’s CT Scan machine contract

Published May 12, 2021
A view of Mayo Hospital in Lahore. — Photo courtesy Mayo Hospital website/File
A view of Mayo Hospital in Lahore. — Photo courtesy Mayo Hospital website/File

LAHORE: The Punjab government has blacklisted a multinational and two local firms for violating service contract of the CT Scan machine (128 slice) and ancillary services with five-year warranty period for the Mayo Hospital, Lahore, and referred the case to the Federal Investigation Agency (FIA) to launch a case against them.

The Rs200 million machine has been dysfunctional due to the technical faults the companies failed to address and caused a loss to the national exchequer.

The Punjab government also referred the matter to the managing director of the Punjab Procurement Regulatory Authority to debar the firm from procurement of all procuring agencies and upload the order on the official website of the authority. It has also intimated to the chief secretary Punjab, chairman of the Planning & Development Board, all administrative secretaries, the director general health services, Punjab and all the vice chancellors of the medical universities about the companies and the punishment awarded to them.

An official privy to the information told Dawn that the action was proposed by the Punjab Specialized Healthcare & Medical Education Department being competent authority on finding illegalities and criminal negligence during a high-level inquiry. Interestingly, he said, the bank guaranty documents submitted by a company were stolen from the office of the health secretary and the payment amounting to Rs7 million was later got released in the starting phase of the five-year warranty.

The inquiry report stated that the health department had blacklisted multinational company M/s Hitachi Japan and its two authorised agents M/s Ittefaq Sons (pvt) Limited and MS Engitech for a period of two years for future participation in the tenders under Rule 21 of PPRA Rules, 2014. A copy of the inquiry report is also available with Dawn.

The report stated that a contract was awarded to M/s Intact Sons (pvt) Limited, Lahore being authorised agent of M/s Hitachi Japan in Pakistan by health department for the supply of CT Scanner (128 slice) and ancillary services with five-year warranty period, for Mayo Hospital, Lahore on June 28, 2013. It stated that the machine was installed in emergency radiology department of the hospital.

The Mayo Hospital medical superintendent intimated to the company that the machine got out of order in May 2017 but no response was found. Later, various letters were written to M/s Ittefaq Sons, the authorised agent of M/s Hitachi, Japan to make the machine functional but in vain. The hospital also intimated to M/s Hitachi Japan about the non-functioning of the said machine but there was no fruitful impact.

The department vide letters of Jan 28, 2019 and Feb 13, 2019 directed M/s Ittefaq Sons to make the machine functional. Another reminder was given on Aug 22, 2019 but to no avail.

It stated that following the contract agreement, a certificate provided from the manufacturer had been submitted that the after sales services / backup services shall be provided jointly with the local agent and in case of change of local agent, they will provide the after sales services themselves or through newly appointed agent for five years from the date of commissioning.

“The requisite certificate was provided by M/s Hitachi Japan through its authorized agent M/s Ittefaq Sons (pvt) Limited, Lahore and accordingly, declared qualified,” reads the inquiry report.

According to the contract agreement, warranty shall be for five-year inclusive of all kind of spare parts (X-ray tube and 64 physical detectors, batteries of UPS, accessories, transducers are also included in pads).

The warranty will start from the date of first patient scan after first visit of application training provided all deliveries and civil works are completed. The warranty will cover labour and parts for all the equipment supplied, stated in the tender inquiry.

The maintenance will be the responsibility of the manufacturer / their agent. An annual optimal uptime of 95% is considered as acceptable level of performance, reads the inquiry report. “However, the indifferent behavior of M/s Hitachi Japan was totally unwarranted and deserved severe legal action under Rule 21 of Punjab Procurement Rules, 2014 as the firm has acted in a manner detrimental to the public interest and consistently failed to perform the contractual obligations,” reads the report.

A show-cause notice was served upon M/s Hitachi Japan on Oct 22, 2020 through its representative Mr Adnan Chisthi, CEO, M/s Engitech, authorised agent of Hitachi Japan for after sale service and M/s Ittefaq Sons (pvt) limited, Lahore.

The company M/s Hitachi Japan submitted its reply later which was found unsatisfactory, it said. However, M/s lttefaq Sons did not submit any reply regarding show-cause notice.

The firms were also given an opportunity of personal hearing on Jan 27, 2021 in the presence of additional medical superintendent, additional principal medical officer (Radiology) and bio-medical engineer of the Mayo Hospital.

Chief Executive Officer M/s Eastern Medical Technology Services Lahore G.A Shakir represented the Hitachi Japan, who was authorised by it and Rahat Malik represented M/s Ittefaq Sons.

During the personal hearing meeting, M/s Ittefaq Sons submitted reply of show-cause notice on Oct 22, 2020 and failed to produce any plausible reason / proof in its defense.

Moreover, M/s Hitachi Japan vide letter on Feb 10, 2021 requested to grant permission to evaluate the CT scan machine and sought next seven working days to complete the inspection of the machine.

Published in Dawn, May 12th, 2021

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