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Procurement scandal hits Ukraine’s Health Ministry as medics lack COVID-19 protective gowns

Procurement scandal hits Ukraine’s Health Ministry as medics lack COVID-19 protective gowns
Photo: Serhii Nuzhnenko/ (RFE/RL)
Procurement scandal hits Ukraine’s Health Ministry as medics lack COVID-19 protective gowns
Edited by: Yuri Zoria

Ukraine’s medical doctors faced the novel coronavirus pandemic with the country’s healthcare system falling apart, poor conditions for treatment, low salaries, and never-ending corruption within healthcare institutions. No surprise, when the infection had just started spreading across Ukraine the healthcare workers lacked even basic protective gear. Various companies, organizations, and ordinary Ukrainians volunteered to contribute to medics’ protection.

Nevertheless, the number of infected healthcare workers remains high. Every fifth coronavirus patient in Ukraine is a doctor or a nurse. In total, 2,325 healthcare workers got infected out of all 11,913 COVID-19 cases registered in Ukraine as of 3 May.

Meanwhile, another corruption scandal hit the Ukrainian Ministry of Health as it purchased the overpriced medical fully protective gowns abroad and they haven’t even been shipped to Ukraine in time.

Swapping ministers amid quarantine

In the course of the ongoing quarantine, Ukraine has managed to replace health ministers two times. Mykola Stepanov, the current one, took the office on 30 March 2020 after Illia Yemets. Yemets, in turn, was appointed only weeks before his own dismissal, on 4 March 2020.

Serving for less than a month, minister Yemets contrived to make several controversial statements. For example, he stated that there was no sense to fight for the lives of the elderly since he believed that their life expectancy was only 65 years anyway (it was about 72 years in Ukraine in 2017, – Ed.). Apart from it, he made an attempt to bypass Ukraine’s public procurement system ProZorro and international organizations while purchasing protective gear for medical staff.

As told by MP Oleksandra Ustinova of the Voice (Holos) faction, Yemets tried to do everything to make the Health Ministry buy medical gear via its own tender committee. The government had allocated UAH 67 million ($ 2.5mn) for this task.

On 30 March, Yemets resigned. The allocated funds were partly spent on purchases through international organizations.

New minister, new scandal

Newly appointed Minister Stepanov made the purchase of a large consignment of personal protective equipment for medics a priority on his to-do list. However, he managed to get into a corruption scandal after a month in office.

At first, the Stepanov-led health ministry applied to the state enterprise Medical Purchases of Ukraine for the medical gear and it brought an advantageous result.

Ustinova explained that the ministry expected an approximate cost of about UAH 400 (about $15) per protective overall. The state enterprise managed to bargain a 40% discount for the large volume of the order. Eventually, the state had to pay the Ukrainian producer Tekstil-Kontakt UAH 22 million (about $815,787) for 90,000 medical overalls saving UAH 13.7 million (about $508,013). Moreover, previously volunteers and some hospitals have already bought gear from the producer which gave it credibility. An additional 50,000 protective suits might have been produced for the saved money.

Ustinova stressed that the tender was conducted according to all the quality requirements published by the ministry and to which all the oblast authorities, hospitals, and volunteers were sticking.

Previously, a significant part of the ministry’s purchases was conducted through the Medical Purchases enterprise. However, this time Stepanov refused to sign the documents. Later on, the Ministry justified it saying that Medical Purchases of Ukraine did not agree on the details of the ministry’s deal and did not provide the required paperwork in time. Another explanation that came from the ministry was that the Ukrainian-made fully protective gowns didn’t have glued seams and didn’t provide isolation from coronavirus infection, not meeting the requirements of the European certificate of protection.

Arsen Zhumadilov, head of the Medical Purchases of Ukraine, said in turn that there was no such requirement of having the particular certificate in the ministry’s gear purchase order. However, the overalls have all needed protection from the infection anyway which is confirmed by an authorized body – the State Labor Service.

What happened instead

Still, the Ministry decided to announce a new tender, this time conducting it through its own tender committee. It found a winner in an extremely short term of about a day.

This time, the price per overall was two times higher than before. Therefore, instead of UAH 22 million (about $815,787) for 90,000 overalls the state would pay UAH 34.8 million (about $1.3mn) for the 71,000 pieces.

Tekstil-Contact has already started to sew the suits but lost the order to a little-known distribution firm, Meddiv that has made a commitment to sell the Ministry the products from China.

Ustinova writes that Meddiv, the winner of the new tender, operates in Ukraine for less than a year. She hints that the company probably knew that it would win in advance. All the previous tenders the company won were related to coronavirus protection purchases by the Ministry of Internal Affairs and enterprises affiliated to it.

According to the recent agreement, all 71,000 overalls had to be delivered before 1 May.

And on 29 April, the Health Ministry informed that the delivery was delayed due to an additional decision of the Chinese government on the total control of all exports of the personal protective equipment. However, the justification also raises doubts. Meddiv provided a letter from a Chinese producer to prove the reason for the delay. The Chinese company states that it applied for the registration to be able to export its products which raises doubts about whether it ever exported its products before. The company also noted that 1-5 May aren’t working days in China, so the shipment might be delayed even more.

Meanwhile, Ukrainian healthcare workers are still fighting the virus with what they have.

What the case reveals about system’s issues

This case of procurement raises far more general questions regarding Ukraine’s healthcare system.

Three interlocutors of within the ministry consider the case as the beginning of the re-division of the multi-billion market. They are confident that the management of the Ministry will try to take control over the state procurement of medicines which amounted to about UAH 10 billion (about $370mn) in 2020, and they may attempt to take control over the budget funds allocated for fighting COVID-19 totaling to more than UAH 15 bn (about $556mn) that are currently distributed by the National Health Service of Ukraine.

The issue of corruption in the procurement of medicines has a long history in Ukraine. To tackle it, the Ministry applied to international organizations such as the UN Development Program in Ukraine, UNICEF, and Crown Agents in 2015. Ukraine asked the organizations to temporarily take control of the purchases. Gradually the function had to be taken over by the state enterprise Medical Purchases of Ukraine.

Two interlocutors of within the healthcare system consider the recent scandal over the purchasing of protective overalls is an attempt to spoil the reputation of the Medical Purchases of Ukraine using dirty media campaigns meant to prove the enterprise’s incompetence. It would open the door for the Ministry itself to take control over the procurement.

The second stage of the healthcare reform in Ukraine was scheduled for 1 April. Former Minister Yemets raised doubts over its success. He was going to change the financing scheme for medical institutions by overtaking this function from the National Health Service of Ukraine, and by taking control over the purchases allegedly through the appointing of a loyal person to the position of the head of the Medical Purchases of Ukraine.

However, Yemets resigned and the second stage of the reform kicked off.

Rumors on the total rollback of the reform started to circulate in the media on 5 May. Minister Stepanov answered that no one will stop the reform, but some issues should be fixed. On the next day, however, Prime Minister Denys Shmyhal ordered Stepanov to find a way around to keep the reform going.

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Edited by: Yuri Zoria
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