Dirty Contract: How Nigeria’s Health Ministry gave N2.5B ARV contract to their Indian cronies
Two weeks since the deal closed ....
By: Emmanuel Maya

NigeriaHIVinfo.com obtains documents detailing the latest secret dealings in the Federal Ministry of Health

“My administration is determined to encourage the production of HIV/AIDS drugs in the country in order to sustain the treatment initiative for those infected with the disease". President Olusegun Obasanjo during the inauguration of an inter-ministerial committee under the leadership of the Minister of Health, to implement the initiative of increased local production of the drugs, July 3, 2006.

N2.5 billion is at stake and that is what four Indian companies have cornered with the help of their Nigerian cronies and little submission to Due Process. It is two weeks since the deal closed on what Abuja insiders now refer to as the latest jumbo contract; yet dirty details seeping out of the Federal Ministry of Health are already making the capital city stink to high heaven.  As tongues begin to wag, with industry watchers becoming even more bewildered, the fear is rife that the shrewd grip of foreigners on the Nigerian economy, particularly on the business of AIDS is getting even tighter.  Or how else would anyone explain the ease in which a whooping N2.5 billion health budget got into the kitty of some Indians without recourse to due process and in total defiance of the spirit of President Obasanjo’s reform agenda.

Indeed, it couldn’t have happened anywhere but Nigeria.  Though no one can say for sure when the decision to award the N2.5 billion contracts was taken, no sooner did vested interest began to dig in for a kill.  What followed could only be measured with the precision of a cold-blooded predator.  By the time it ended, it was another sad story showing that President Obasanjo’s flagellations on reforms and transparency have actually not fooled anyone.

Certainly not the tribe of foreign businessmen crawling across various turfs of the Nigerian economy with the instinct of fortune hunters. NigeriaHIVinfo.com investigations revealed that the sprint for the N2.5 billion booty quietly began, long before ministry officials blew the whistle.  It was only three days to the close of submission (Tuesday, 20th June 2006) when a few indigenous players became aware that the Federal Ministry of Health had issued invitation for bids for the supply of Anti-Retroviral Drugs, Anti-Malarial Drugs, Anti-Tuberculosis Drugs and the execution of other capital projects. Curiously, the privileged Nigerians who got this piece of news did so from the mouths of a representative of one of the Indian companies that eventually won the bid.  Though some of the Nigerians managed to file in their papers in the last hour, it was discernible that the foreigners and their Abuja cohorts had sunk their teeth into the big meat.

A Suspicious due process
As contained in documents obtained by NigeriaHIVinfo.com, ministry officials in an effort to fulfill all righteousness, chose to observe the dictum of Due process by advertising the invitation for the bid in an obscure house journal called Federal Tenders Journal, dated Monday 29th May, 2006. Specifically, the obscure advertisement, emanating from the Federal Ministry of Health read: "Invitation for pre-qualification of contractors for the execution of capital projects.  The Federal Ministry of Health invites interested and reputable contractors, pharmaceutical companies and suppliers with relevant experience and good track record for pre-qualification for the supply of the following Lot:

1. Anti-Retroviral Drugs
2. Artemisinin Based Combination Therapy (ACTs)
3. Sulphadoxine Pyremethemine
4. Insecticide Treated Bed nets (both long lasting and king size)
5. Laboratory Equipment and Reagents
6. Anti TB Drugs
7. Computers, printers etc
8. Operational Vehicles (Toyota Prado, Hilux, Peugeot etc
9. Construction of Research and Training centre at the NBTS Zonal Office, Ibadan."
   

Pre-qualification requirements stated for the contracts were that bidders must submit the following:

1. Certificate of registration with Corporation Affairs Commission
2. Evidence of current registration with the Federal Ministry of Health
   
3. Evidence of current registration with NAFDAC (for Lot i,vi)
4. Evidence of current tax clearance
5. Evidence of VAT registration
6. Evidence of experience with similar supplies in the last three years in Nigeria or other tropical country.  Name(s) of client(s) and contract sum(s) should be provided for Lot i to vi;
7. Evidence of financial capability to handle the job;
8. Evidence of manufacturing facilities and their location (not P.O.Box).  This requirement must be met even when a bidder is an accredited representative of a manufacturer (for Lot i to vi only);
9. Name(s) and address (es) of banker(s);
10. Company profile with names and qualification(s) of key personnel;
11. Evidence of current registration with regulatory authority in country of manufacture (for Lot i-vi only);
12. Evidence of Good Manufacturing Practices (GMP) with full details of in-house Quality Control Facilities and WHO pre-qualification (for Lot i to iii only);
13. Foreign manufacturers should provide name and address of local representative in Nigeria with evidence of full registration with the pharmacists council of Nigeria (for Lot i to vi only).

It further stated that the sealed "complete pre-qualification documents should be deposited in the Tender Box in Room 1119, 11th Floor, Federal Ministry of Health, Federal Secretariat, Phase III, Ahmadu Bello Way, Abuja, not later than two weeks from the date of this publication.  Tenderers should note that only qualified companies would be invited to bid.  The Federal Ministry of Health reserves the right to reject any or all pre-qualification documents."  It was signed by D. J.Y. Jiya, Director (Health Planning & Research) for Hon. Minister of Health. NigeriaHIVinfo.com further gathered that bidders paid a non-refundable fee of N50, 000.  Of course, that was only official.  What went to junior ministry officials to do the right thing was a lot more and varied from person to person.  Bids actually opened a little after 12 noon on 23rd June on 1st floor in the conference room of the Health Minister.  The ministry even made a show for transparency and zero tolerance for corruption by threatening to throw out any bidder found offering, giving or soliciting for anything of value to influence the action of a public official in the procurement process or in contract execution.  "We will declare a firm ineligible, either indefinitely or for a stated period of time, to be awarded a contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing." At the end, it was a case of "the more you look, the less you see." Save for what one insider classified as the petty category, four companies won the juicy contracts.  Amazingly, the four are Indian companies, among which are Strides Accolades worldwide ventures, Ranbaxy and a very new one called EBS.  When this reporter made enquiry to the Federal Ministry of Health to know what EDS stood for; nobody seemed to have a clue.  It was only said that EBS is owned by some people and that they represent an interest in South Africa.  Not one of the Nigerian companies got anything.

	Click on Thumbnails below to view actual size
			Exhibit A
	Exhibit B		Exhibit C		Exhibit D

Running rings around the president in the wake of the controversial N2.5 billion contract, suggestions are strong that the whole process was characterized by deceit, use of front companies, technical exclusion, capital flight and even economic sabotage.  Unable to hide his exasperation, one industry player told NigeriaHIVinfo.com:" The recent occurrence in the Health Ministry leaves no one in doubt that Indians are in firm control of that ministry.  None of the actions of that ministry as regards the award of the N2.5 billion contract was in consonance with President Olusegun Obasanjo’s economic principles. None of them was taken with respect to national interest.  For all we know, the foreigners may be chuckling in their own country.  The president can have his say but they will always have their way. The only way of understanding how much damage has been done to the Nigerian economy with the manner that country was awarded, is to imagine that some foreign firms have been contracted to import sand and gravel from overseas for a major construction in Nigeria. Why pay a foreigner to sell sand to you when there is abundance of dunes in your country? Can you possibly see ice to an Eskimo?  It is either he is foolish or both of you are fraudulent.  The controversial contract in the Health Ministry is as bad as that." Piecing together the incredible manner in which the Indians had their way, NigeriaHIVinfo.com gathered that the pact between the foreigners and Ministry Officials was such that big manufacturers in the Nigerian pharmaceutical industry like Evans and may & Baker were not even aware that such a huge tender was being advertised by the Federal government of Nigeria. It was learnt that most of the indigenous company that bided heard of the bid only a few days to the deadline but managed to send in their papers. Indeed the national scandal that has become the N2.5 billion Health contract is better told with the plight of indigenous companies who sunk millions into ARV production but are never patronized by government.

The importance attached HIV/AIDS by the Obasanjo administration is such that the President placed the national HIV/AIDS committee under his direct purview.  There was this clarion call by the Federal Government to local manufacturers to do something in view of the high cost of Anti-Retroviral Drugs (ARV) imported into the country.  In 2001, one of the ARV drugs was selling as much as N32, 000- N40, 000 for a month’s dose. In 2005, an indigenous company picked up the gauntlet, manufacturing the first indigenous brand of ARV.

Before then, Nigerians, especially officials of the Federal Ministry of Health occupied themselves making endless trips to Brazil in the name of seeking to transfer technology for the manufacture of ARV into Nigeria.  With the benefit of hindsight, estacode appeared to be the prime motivation. 

Industry watchers said that if anything, the entry of the local brands of ARV into the market helped to crash the prize of the drugs.  Given that today, imported ARV which used to sell as high as N40, 000 now go for N3, 000 or less, it became clear that multinationals, under whatever guise, were just ripping off the government and the people. Expectedly, it was not long before an elated President Obasanjo visited one of the indigenous manufacturer’s factory in Ogun State.  Impressed by what he saw, the president was said to have assured the local manufacturer of the necessary government patronage.

How Nigerian companies were excluded is the shrewd and secret manner adopted by the Health Ministry which helped to keep companies like Evans and May & Baker in the dark, those who thought they were lucky to  have entered the bid were eliminated by the ministry using a hurdle called WHO pre-qualification. NigeriaHIVinfo.com investigation revealed how the Federal Government tender was carried out.  First, the companies were required to submit documents for the lots they were interested in.  Those found to be qualified were asked to pay for their tenders bidding documents.  It is the bidding document that will enable the companies to quote. For those interested in ARV, ACTs (anti-malarial), sulphadoxine pyrimethemine (another anti-malarial) and anti-TB drugs, all manners of requirements were listed to enable them qualify for participating in each of the Lots.  For Lots 1, 2, and 3, it was said that interested companies must possess WHO pre-qualification. But even the WHO pre qualification is still subjected to local approval. In essence, If for instance NAFDAC has given approval to a local manufacture for a drug, even though the local manufacturer does not meet WHO pre qualification for the bid, WHO itself suggested that the local approval overrides its pre qualifications criteria. One insider whose company participated in the last controversial bid dismissed WHO pre-qualification as a political gimmick introduced by the West, first and foremost, to safeguard their interest. The analyst who prefered anonymity explained: "It is like this.  Whatever donations the West are giving to you, they use the WHO to give to you with one hand and use the same WHO to collect back even in multiples using the other hand.  So, if the whiteman introduce WHO pre-qualification for their international funds, it does not provide basis for accessing your tender, especially when you are spending your local fund.  It is not an overiding document over a country’s national regulatory body like NAFDAC.  By introducing WHO pre-qualification, the Federal Ministry of Health is saying that they do not recognise all the good works of NAFDAC.  They are now making the effort of this woman look lower in status and quality to the Indians because most of the things she has approved, registered, and certified fit for human consumption are now being turned down by the Health Ministry in preference for Indian products; the same Indians Akunyili has fought for years over fake and substandard drugs”.

NigeriaHIVinfo.com gathered that in its desperation to use WHO pre-qualification to disqualify the indigenous companies, the Ministry of Health contradicted itself by shortlisting the companies for anti-malarial and anti-Tuberculosis yet failed to shortlist them for ARV. Curiously, the same conditionalities apply to the three Lots. The industry insider further told NigeriaHIVinfo.com that the Health Ministry officials are putting all kinds of smokescreen to disqualify those they do not like.  "It is because they have their own people.  It is in ARV that the big meat is.  The Ministry is spending almost N5 billion this year just on ARV.  About N2.5 billion is being spent in this exercise.  In another four months, the second phase will come up." Investigations further revealed that none of the companies given the ARV Lot manufactures the drug in Nigeria.  Until now, Ranbaxy was thought to be manufacturing liquid ARV but industry watchers dismiss it as a fluke.  One said: "Go to their factory in Isolo.  They are not manufacturing anything.  They are just bottling what they bring in from India. Everything they supply the Federal Government comes right down from India thereby enriching their own economy, providing more jobs for their people and fully utilizing capacities of their industries, yet our own officials do not see all these”.  As the rebuff of local manufacturers of ARV continued, observers were unsure of what to make of the event of Monday, July 3 when the Federal Government set up an inter-ministerial committee under the leadership of the Health Minister, Prof. Eyitayo Lambo, to implement the initiative of increased local production of HIV/AIDS drugs. At a meeting in the presidential Villa Abuja, President Obasanjo directed that concerted action be taken to provide cheap locally- produced ARV in the country in order to sustain the treatment initiative for those infected with the virus.