Karnataka Covid scam: Inquiry reveals widespread corruption in procurements

A report submitted by retired High Court judge Michael D’ Cunha Commission of Inquiry, who is investigating the alleged Covid-19 scam which took place during the previous BJP-led government in Karnataka, has uncovered “serious illegalities, malpractices, and corruption at every stage of the procurement process” during the pandemic.
The incumbent Karnataka Cabinet-led by Chief Minister Siddaramaiah, in response, has recommended recovering Rs 500 crore in penalties and excess payments from the involved suppliers and service providers.
The report, accessed by India Today TV, details irregularities across several procurement bodies. The Karnataka Health and Family Welfare Department (HFWD) was responsible for procurements amounting to Rs 1,754.34 crore, while the National Health Mission (NHM) handled Rs 1,406.56 crore.
The Directorate of Medical Education oversaw purchases worth Rs 918.34 crore, the Karnataka State Medical Supplies Corporation Ltd. (KSMSCL) acquired medical equipment for Rs 1,394.59 crore and drugs for Rs 569.02 crore, and Kidwai Memorial Institute of Oncology made procurements totalling Rs 264.37 crore.
Irregularities were found in most of these transactions, with recovery of funds recommended, the report stated.
Based on these findings, the commission has recommended action for the recovery of penalties and excess payments from suppliers and service providers. Furthermore, disciplinary enquiries have been recommended against accused officials of the respective departments.
In cases where criminal offences have been identified, the commission has called for initiation of prosecution, stating that there is prima facie evidence of offences under the Bharatiya Nyay Sanhita (BNS) 2023.
The most alarming irregularities were found in the procurement of oxygen plants and the construction of ICUs, where discriminatory practices were adopted in vendor selection, resulting in violations of the Karnataka Transparency in Public Procurement Act.
The investigation also focused on the Kidwai Memorial Institute of Oncology, where irregularities were found in RT-PCR testing worth Rs 125 crore, equipment procurement worth Rs 31 crore, drug procurement amounting to Rs 33 crore, and manpower-related discrepancies totalling Rs 74 crore.
Additionally, the probe into tender processes uncovered notable failures. Many tenders were awarded after a single bid and accepted without proper oversight, often on the first call. In over 30 cases, no pre-bid meetings were conducted, and no paper notifications were issued for advertisements, the commission stated.
Moreover, a single laboratory was consistently awarded most of the tenders, which raises concerns over potential favouritism and manipulation.
Earlier in the day, the Karnataka government decided to constitute a Special Investigation Team (SIT) and a Cabinet subcommittee to take further action on the report by Justice Cunha. In the “partial” report submitted on August 31 in 11 volumes, the commission examined the expenditure to the tune of Rs 7,223.64 crore.
The commission has sought reports from four zones in Bruhat Bengaluru Mahanagara Palike (BBMP) and 31 districts of the state, and it is yet to receive them.