Will the Minister of HEALTH AND FAMILY WELFARE be pleased to state:-

(a) whether Government has ordered a CBI inquiry into the reported charges of fraud and corruption in five health projects in the country which are being funded by the World Bank;

(b) if so, what are the details thereof indicating funding amount by the World Bank in million dollar in respect of each project;

(c) the punitive action taken, so far, at the Central, State and UN level against the offenders involved; and

(d) the present stage of implementation of each above mentioned project? 

ANSWER

THE MINISTER OF STATE FOR HEALTH & FAMILY WELFARE
(SMT. PANABAKA LAKSHMI)

(a) to (d): On 11th January, 2008, the World Bank has shared with us a Detailed Implementation Review (DIR) report, based on the review of five health sector projects which were being implemented during periods varying from 1997 till 2006 end. One project was under State health sector. The five Health Sector Projects are (1) Revised National TB Control Programme (RNTCP-I)(8 May 1997 to 31 March 2006 (USD 124.8 Million) (2) Enhanced Malaria Control Project (EMCP) (27 Oct 1997 to 31 Dec 2005)(USD 114 Million) (3) Orissa Health System Development Project (OHSDP) (8 Sept 1998 to 31 March 2006)(USD 82.1 Million), (4) National AIDS Control Project-II (NACP-II)(11 Sept 1999 to 31 March 2006)(USD 193.7 Million) and (5) Food and Drug Capacity Building Project (FDCBP)(17 Oct 2003 to 30 June 2008)(USD 54 Million). All projects except for one relating to Food & Drugs Capacity Building have ended. The last project is likely to be completed by June 2008. For AIDS and TB successor projects are under implementation.

In this report, the World Bank has mentioned about indicators of deficiencies relating to procurement, oversight and implementation like collusion, bid rigging, deficiency in civil works, equipments not installed because of lack of staff etc. Majority of the deficiencies reported relate to decentralized procurements at the district level, which are implemented at the State level.

The World Bank report suffers from several infirmities. Ministry of Health & Family Welfare has already conveyed its response on the infirmities in the methodology adopted by World Bank emphasizing that the World Bank did not discuss with any of the programme officers either during the review or before finalizing the review report. These discussions would have clarified most of the issues raised in the report. Had this been done, most of the inferences would have been different.

Government of India is committed to eliminate deficiencies or irregularities in all health sector programmes, whether funded domestically or externally. Structural deficiencies which were noted in the earlier programmes have been taken care of in the successor programmes. Whenever such irregularities have come to notice of the Government, appropriate actions have been taken, wherever required in the past. Some of the criminal, penal and disciplinary actions taken are as follows:

i) Suspended business with two firms viz. M/s. Nestor Pharmaceuticals and M/s. Pure Pharma in July, 2005 on charges or reported collusion.

ii) A case was registered by CBI on 21.8.2006 against M/s. Pure Pharma and M/s. Nestor Pharmaceuticals and the case is at an advanced stage of investigation.
iii) Two officers (Shri M.P. Gupta of Hospital Services Consultancy Corporation and Shri Vasant Bhat of Hindustan Latex Limited) from the Procurement Support Agencies, who were allegedly involved in procurement irregularities, were suspended in 2006 and continue to be under suspension. Departmental proceedings against them are also at an advanced stage.

Further, after receipt of the report, following actions have been taken:

i) To address the systemic deficiencies pointed out in the World Bank report relating to procurement, implementation and oversight a Joint Action Plan has been finalized after intensive discussions with the World Bank keeping in mind specific interventions and timelines..

ii) Three new cases pertaining to Chhattisgarh and Karnataka referred to CBI for further investigation. One of these was identified through an analysis of the audit report. In a similar case the Government of Orissa has filed a criminal case and initiated departmental proceedings.

iii) Government of Orissa has now ordered a full-fledged vigilance inquiry to look into all deficiencies pointed out in the World Bank report regarding the State Health System project.