MOH and Pharmaniaga shifting blame over ventilator debacle

The Health Ministry and Pharmaniaga Bhd blamed each other for 104 faulty ventilators they received from China in 2020, said the Public Accounts Committee (PAC).

In a report published yesterday, the committee pointed out that there was no contractual agreement signed between the two in regard to the ventilators procurement, where Pharmaniaga’s subsidiary Pharmaniaga Logistics Sdn Bhd (PLSB) acted as an intermediary between the Health Ministry and suppliers in China.

Due to the absence of such an agreement, PAC said no one could be held responsible for the blunder.

“The blame game between the Health Ministry and Pharmaniaga has thus far caused the inability to initiate legal action (to claim compensation for the faulty machines),” the report read.

The PAC was tasked to investigate government spending on Covid-19 management during the height of the pandemic in 2020, particularly on procurement of ventilators, vaccines, and personal protective equipment.

This comes after a National Audit Department report raised issues with the procurements, which were done when the country was under a health emergency.

According to witnesses’ testimonies to the PAC, the Health Ministry believed Pharmaniaga should be responsible for the ventilators as they were ordered through the company.

“I would like to use the word ‘sepatutnya’ (should be),” said Health Ministry deputy secretary-general Norazman Ayob when asked by the PAC if the ministry should deal with PLSB instead of directly with suppliers in China in the event of issues with the ventilators.

“There is an absence of a contract between the ministry and Pharmaniaga on this matter,” he added.

However, a Pharmaniaga senior executive told the committee that the company merely acted as a consignee to receive the life-saving machines from suppliers and help distribute them to Health Ministry hospitals.

Pharmaniaga chief operations officer Mohamed Iqbal Abdul Rahman reportedly told a proceeding on Sept 14 that the contract for the ventilators procurement was supposedly between the Health Ministry and suppliers.

“The contract is between the ministry and suppliers. Pharmaniaga will be the forwarding agent and will be the recipient in the country,” he said in response to a question by PAC member Syahredzan Johan.

There was also no contract made between Pharmaniaga and the suppliers in China, according to the report.

First-time purchase

Iqbal believed that the Health Ministry is the right party to initiate legal action against the ventilator suppliers, the committee heard.

At one point, he revealed that the Covid-19 pandemic saw Pharmaniaga dealing with Chinese ventilator suppliers for the first time and then transport minister Wee Ka Siong helped.

“This is the first time the Malaysian government is buying ventilators from China. So, we don’t have experience.

“So, our contacts (were from) the transport minister at that time, who had good contacts with China,” he said.

Apart from securing Chinese contacts, Wee also helped arrange for the emergency transport of the ventilators, the PAC was told.

Meanwhile, the PAC report also revealed that the Health Ministry’s legal adviser was not consulted before the ministry issued a letter to appoint Pharmaniaga.

“As far as I know, we were not consulted, but I will check again to confirm. But as far as I was informed and based on information that I have, we were not consulted,” said legal adviser Yang Zaimey Yang Ghazali who testified before the committee in June.

According to the report, the PAC heard from witnesses that the government decided to involve Pharmaniaga in the ventilator procurement process due to several factors.

They include the pressing need to make upfront payments as required by the overseas suppliers and for Pharmaniaga’s established status as a supplier to the government.

The committee also heard that Pharmaniaga took up the job to help the Health Ministry purchase the ventilators as part of its corporate social responsibility, where it did not make a profit nor charge the government for the services.

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