THE government has pulled the plug on a US$60 million deal that would have seen a Switzerland-registered company, Drax Consult (Drax), supplying Covid-19 equipment, arguing the firm overpriced its supplies.
This comes as the government has also refused to pay for the goods which include test kits and personal protective equipment (PPE) — which were already in the country —on account that its prices were highly inflated.
Drax, which had been supplying drugs to the National Pharmaceuticals (NatPharm) since last September, was awarded two separate contracts valued for a combined US$60 million.
Authorities have suspended the US$20 million contract and cancelled the US$40 million deal completely.
In a damning letter to acting Health ministry’s permanent secretary Gibson Mhlanga, Finance ministry’s permanent secretary George Guvamatanga said treasury would not pay for the supplied goods until Drax reviewed the prices downwards.
“As you are aware, a meeting was held between the ministers of Finance … and Health and Child Care in which a representative of Drax Consult was invited to participate to discuss the contract on the supply of Covid-19 requirements, as well as the suspension of the US$20 million contract and the cancellation of the US$40 million contract with the same company.
“One of the outcomes of the meeting was that government did not accept the prices that had been quoted on items under the above-mentioned contracts and Drax Consult was advised to engage NatPharm to review the prices downwards.
“The understanding was that payment would only be made upon submission of revised prices, as well as upon confirmation of delivery of the outstanding Covid-19 equipment which the supplier had advised was still in transit,” Guvamatanga wrote.
This week Drax was accused of inflating prices of PPEs and some medical consumables it had already paid into the country which were reportedly valued at nearly US$ 1 million.
The government, according to Guvamatanga refused to pay for the goods until Drax and NatPharm had reviewed the prices downwards.
Guvamatanga said he authorised the release of the consignment of the Covid-19 equipment, which was being held at Robert Gabriel Mugabe International Airport, on May 8 based on the urgent need for test kits in the country.
However, the government would not be paying for them until the Health ministry and Drax agree on reasonable prices.
Local Government minister July Moyo, who is also in charge of mobilising resources to fight Covid-19, was not reachable yesterday when the Daily News contacted him.