India cancels orders for Chinese COVID-19 test kits; says will not lose a single rupee

The Indian Council of Medical Research on Monday asked the states to stop using COVID-19 rapid testing kits procured from China due to their poor quality even as the government said not a single rupee will be lost in cancelling the orders as payments were not made to the Chinese suppliers.

India procured around five lakh rapid antibody test kits from the two Chinese firms, Guongzhou Wondfo Biotech and Livzon Diagnostics, and they were distributed to several states reporting rising cases of the coronavirus infection.

In a communication to chief secretaries of all states and union territories, the ICMR asked them to stop using the kits saying it found "wide variation" in effectiveness of the equipment supplied by the two Chinese firms despite promise of good performance.

"The ICMR has not made any payment in respect of these supplies. Because of the due process followed (not going for procurement with 100 per cent advance amount), Government of India does not stand to lose a single rupee," the health ministry said, in the midst of a raging controversy over the procurement.

Earlier, Congress leader Rahul Gandhi alleged that some people were indulging in profiteering while supplying rapid test kits for COVID-19 to the government and demanded that Prime Minister Narendra Modi take strict action against them.

The Congress cited media reports about rapid test kits being sold at around 150 per cent profits to the government and asked Modi to fix responsibility for the same.

In an order last week, the Delhi High Court fixed the price of the antibody test kits at Rs 400 each as against Rs 600 approved by the ICMR.

The ruling came on a plea by two companies, Rare Metabolics Life Sciences Pvt Ltd and Aark Pharmaceuticals, which had entered into an agreement with Matrix Labs, for distribution of the kits in India. Matrix Lab is the the importer of the kits.

The two companies approached the court after Matrix sought full payment for the kits before delivering them, according to details submitted in the court.

In a fact sheet on the issue, the government said it had conducted a tender process to procure the kits and the evaluation committee received four bids of Rs 1,204, Rs 1,200, Rs 844 and Rs 600. Accordingly, bid offer of Rs 600 was considered as it was the lowest.

The government said the procurement was undertaken when there was a huge demand for the test kits globally and various countries were applying their "full might", monetary and diplomatic, to acquire them.

The government said the ICMR also tried to procure the kits directly from Wondfo in China but the quotation received for direct procurement had a number of issues including of 100 per cent direct advance without any guarantees.

It said there was no commitment on timelines and rates were communicated in US dollars without any clause for accounting for fluctuations in prices.

"Hence, it was decided to go for Wondfo’s exclusive distributor for India for the kit who quoted an all inclusive price for FOB (logistics) without any clause for advance," it said.

The government had decided to procure rapid antibody testing kits as the regular tests (RT-PCR) takes longer time.

"Based on scientific assessment of their performance, the order in question (Wondfo) along with order in respect of another make found under-performing have been cancelled," the government said.

The ICMR in its advisory advocated that RT-PCR throat/nasal swab test is the best use for diagnosis of COVID-19.

The RT-PCR test detects the virus early and is the best strategy to identify and isolate the individual, the advisory said.