Silverbacks Pharmacy Ltd has responded to claims that it supplied an oxygen plant to Mulago National Referral Hospital at an inflated rate, saying the cost variation was caused by the exchange rate differences and air freight as this was an emergency procurement.
The response comes amid reports that the COVID-19 response in the country is lacking and that substandard oxygen plants were installed at Mulago.
The ‘Oxygen Plant debate’ has since attracted commentary from various individuals among whom is Dr. Kizza Besigye who claimed that the numerous “urgent procurements” for Covid-19 response, made by the government and line departments, didn’t follow any procurement procedures and that though “very urgently” done, many of the procured items haven’t been delivered after several months.
Besigye further alleged that Silverbacks Pharmacy Limited, a company that was contracted to supply and install oxygen plants for Mulago and Entebbe Hospitals at a cost of Shs 6.4 billion had not delivered on deal by September yet payment for the service had been fully done by June 30, 2020.
“100% of their invoice was paid by 30th June 2020, but by September, work hadn’t commenced, according to the Covid-19 Interventions Report of October 2020,” said Besigye.
Below is Silverbacks Pharmacy LTD response on the contract and procurement of Oxygen plant:
Silverbacks Pharmacy Limited, is a medical equipment and pharmaceutical supplies company that has been the sole distributor for the Ozcan Kardesler brand Oxygen Plants in Uganda since 2015 to date.
The company was incorporated at the Uganda Registration Services Bureau in Kampala in 2004, licensed by the National Drug Authority since 2004 and is registered with the Public Procurement and Disposal of Assets Authority.
The Company has in the past 5 years installed and maintained 14 medical oxygen plants at the various regional referral hospitals across Uganda including Jinja, Mubende, Hoima, Soroti, Lira, Gulu, Fort Portal, Mbale, Masaka, Mbarara, Kabale, Naguru, Arua, and Moroto.
“Each of the above hospitals has oxygen plants whose capacity is 15m3/hr of medical grade oxygen. The Company has a proven track record and trained technical staff who maintain the different plants,” a statement issued by Silverbacks Pharmacy reads.
Prior to the Covid-19 global pandemic, Silverbacks Pharmacy participated in a tender issued by Mulago National Referral Hospital for the installation of an oxygen plant. Silverbacks emerged the best evaluated bidder for Procurement Reference Number MHC/SERVICES/19-20/00098.
As part of the Covid-19 national response, Ministry of Health (MOH) issued a Request for Quotations to which Silverbacks Pharmacy responded.
MOH then contracted Silverbacks Pharmacy under Procurement Reference MOH/SUPLS/19-20/137 to supply and install 7 medical oxygen plants as per the details;
- Mulago National Referral Hospital 4 oxygen plants. (3 plants with a capacity of 30m3/hr each, and 1 plant with a capacity of 35m3/hr)
- Entebbe Grade B Hospital 1 Oxygen plant with a 16m3/hr capacity
- Mbarara Regional Referral Hospital 1 plant with a capacity of 11 m3/hr
- Kayunga Hospital 1 plant with a capacity of 11 m3/hr
This procurement also included 3 filling stations, 450 cylinders, 450 regulators, humidifier bottles and cannulas at a cost of Uganda Shillings 6.4 Billion. The Company provided MOH with an Advance Payment Guarantee as security.
Responses to some allegations in the Press and Social Media
Silverbacks Pharmacy Limited has addressed allegations whose major concerns dwell on the difference in the supplies procurement costs.
One of the allegations indicates that the same supplier, Silverbacks, is charging the same procurement amount for two oxygen plants in 2020 as it did for the same installation in 13 regional referral hospitals only 3 years ago.
“It is worth noting that the same supplier M/s Silverbacks installed oxygen plants in 13 RRH in 2017 at the same cost that GOU is spending on only 2 oxygen plants today (FY2019/20),” reads the allegation from an undisclosed source.
In 2017, Government of Uganda procured 13 medical oxygen plants with a capacity 15m3/hr each. In 2020, GOU procured 7 oxygen plants and not 2 as alleged above.
The total installed capacity of the plants supplied in 2017 was 195m3/hr, at a cost of USD 1.8 M (equivalent of Uganda Shillings 6.786 billion).
The total installed capacity of the plants supplied in 2020 was 163m3/hr at a cost of Uganda Shillings 6.4 billion. These procurements differed in specifications of plant size and works. In 2020 the price disparity is brought about by the following;
- Additional items procured in 2020; that is (450 cylinders, 450 regulators and accessories), air freight due to the emergency nature of the procurement, exchange rate difference between 2017 and 2020.
- By September 2020, all medical oxygen plants, cylinders and accessories were delivered via AWB NO 235-ISL-77399770 and cylinders were distributed to 22 hospitals as per the MOH delivery schedule.
- Advance payment from MOH was obtained due to the emergency nature of the procurement, the global pandemic situation, global scarcity and high demand of oxygen supplies and equipment related to treatment Covid-19 worldwide.