Exclusive: How the Bulk of Assam's Sanitiser Orders Went to Firm Linked With CM at Much Higher Rate

The Assam government paid Rs 25 (Rs 37 with GST) to a firm for each 200-ml bottle of sanitiser it ordered. To another, with links to Himanta Biswa Sarma, it paid Rs 231 for every 500-ml bottle and Rs 100.30 for every 100-ml bottle – Rs 137 and Rs 81 more per bottle respectively if the former firm's rates were to be applied. 

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This report is a joint collaboration between The Wire and Guwahati-based news portal The Cross Current. Read the previous report of the series, on ‘urgent’ orders to a firm owned by Himanta Biswa Sarma’s wife Riniki Bhuyan Sarma, here.

Guwahati: As the nation dealt with the unprecedented emergency of the COVID-19 pandemic in 2020, it is clear that it became an opportunity for the health department of the Bharatiya Janata Party-led Assam government to hand over ‘urgent’ medical supply orders to companies owned by the then health minister Himanta Biswa Sarma’s wife and his immediate family’s business associates.

For instance, the Assam government paid Rs 25 (Rs 37 with GST) to a firm for each 200-ml bottle of sanitiser it ordered. To another, with links to Himanta Biswa Sarma, it paid Rs 231 for every 500-ml bottle and Rs 100.30 for every 100-ml bottle – Rs 137 and Rs 81 more per bottle respectively if the former firm’s rates were to be applied. 

The Wire, on June 1, reported on a bunch of Right to Information responses that revealed that the state’s health ministry in the then Sarbananda Sonowal-led government placed ‘instant’ and ‘urgent’ medical supply orders in the days leading up to the national lockdown on March 24, 2020.

Among the most significant beneficiaries of such ‘urgent’ work orders – along with JCB Industries, owned by Himanta Biswa Sarma’s wife Riniki Bhuyan Sarma – were GRD Pharmaceuticals and Meditime Healthcare, both owned by Guwahati-based Ghanshyam Dhanuka.

Interestingly, Sarma’s son Nandil Biswa Sarma is currently a majority stakeholder in Vasistha Realtors (formerly RBS Realtors), a firm where Ghanshyam’s father, Ashok Dhanuka, is a full-time director. 

The RTI responses have revealed that GRD Pharmaceuticals, owned by Dhanuka, bagged major contracts for supplying hand sanitisers to the state government during the pandemic. Crucially, the state government bought the hand sanitisers from Dhanuka’s company at a price that was substantially above the available market rates. The health ministry helmed by Sarma also appears to have bent over backwards to accommodate conditions put forward by Dhanuka’s companies to procure the medical paraphernalia – for instance, PPE kits were delivered at the Assam Bhavan in New Delhi, instead of Guwahati. 

The health department’s documents provided to The Cross Current through an RTI reply show that one such ‘urgent’ supply order to GRD Pharmaceuticals was approved at a much higher rate than the price quoted by at least one another company. The March 26, 2020 contract to Dhanuka’s firm was extraordinary as the health department could by then secure suppliers for the disinfectant at a much lower price and within the state itself.

The March 26, 2020 ‘urgent supply order’ issued to GRD Pharmaceuticals by NHM.

So far, there is no public record to show that these supply orders to Dhanuka’s firm were issued by the Sarma-held health ministry by following a tendering or quotation process. Rather, the RTI responses indicated that the contract to the firm may have been approved on the basis of nomination. 

The RTI replies to The Cross Current by the state chapter of the National Health Mission (NHM), which were parsed by The Wire, have revealed that between March 11, 2020, and May 29, 2020, GRD Pharmaceuticals was issued seven orders for delivering 500-ml and 100-ml bottles of sanitisers. This made it one of the biggest suppliers of the product to the state health department during the pandemic. 

The NHM, in annexures attached with the RTI responses, mentioned the work orders for hand sanitisers to GRD Pharmaceuticals with details of the dates on which goods were delivered and the receipt of the quantity procured by the agency.

Though the NHM didn’t provide us any of the hand sanitiser related work orders issued to GRD Pharmaceuticals prior to the lockdown, The Wire and The Cross Current can confirm that at least one such order issued by the health department to the firm – prior to the lockdown announcement – was an ‘urgent’ order. An ‘urgent’ order could mean that the tendering or quotation process might have been skipped in favour of the nomination process.

These inferences were drawn on the basis of documents accessed by these correspondents at the NHM’s Inventory Management System (IMS) which is in the public domain. The IMS documents an ‘urgent supply order’ for hand sanitisers issued to GRD Pharmaceuticals along with the price on March 18, 2020. The government’s order, that can be seen below, didn’t mention any quotation bid by the firm.

The March 18, 2020, order issued to GRD Pharmaceuticals for supply of its Handrub sanitisers.

In contrast, according to the information shared by the NHM, at least one other company – among those which got 14 other pandemic-related work orders during the national lockdown – had bagged a contract to supply medical kits only after its “quotation” was approved by the NHM. 

The curious case of Dhanuka’s hand sanitiser

As per the March 18, 2020, order accessed in IMS, each 500-ml bottle of Dhanuka’s firm’s sanitiser, Handrub, was to be supplied to the state health government at Rs 231.87 including GST, while the 100-ml bottles were priced at Rs 100.30 per piece including GST. 

The GRD Pharmaceuticals website mentions that its Handrub sanitiser is “the first alcohol-based Handrub to be manufactured in the entire North East way back in 2012.” This indicates that the company may well have a monopoly on the product in the region for some years, which may explain its apparent capacity to demand a particular asking rate from the government. 

But what is to be underlined here is that on March 24, 2020 – hours before the sudden lockdown was announced by Prime Minister Narendra Modi – the NHM could successfully place an ‘urgent work order’ to another Assam-based firm, Surma Distillery Private Limited, to supply 1,30,000 hand sanitisers of 200 ml each. However, this was at a rate much lower than what NHM had agreed to pay GRD Pharmaceuticals. 

The March 24, 2020, ‘urgent’ supply order for hand sanitisers issued to Surma Distillery.

The price set for Surma Distillery’s sanitisers was Rs 25 (without GST) and Rs 37 (with GST) for every 200 ml bottle. 

RTI replies received by The Cross Current showed that the Silchar-based Surma Distillery supplied the entire lot of 1,30,000 bottles of 200-ml sanitisers to NHM at that rate. 

If one takes into account hand sanitisers supplied by Surma Distillery, then the 500-ml and 100-ml bottles of the product supplied by GRD Pharmaceuticals should be only Rs 94.40 and Rs 18.88 respectively – as against its rates of Rs 231 for each 500-ml bottle and Rs 100.30 for every 100-ml bottle.  

When contacted, Surma Distillery director Arindam Hore told The Wire, “We are happy that on a short notice, we could fulfil the demand made by the state government to meet a public health crisis. Our main product is country liquor but we were told by the authorities that due to coronavirus, the distillery would soon be closed, so we should supply hand sanitisers instead to meet the emergency as one of the ingredients needed for it, ethanol, is already available with us. So, we followed the World Health Organization’s formula to produce hand sanitisers to meet the emergency and supplied them to the health department in bottles that we could procure back then.” 

The first bottle of hand sanitisers prepared by Surma Distillery. Photo: By arrangement

On being asked whether the government had approached it for more hand sanitisers after the order was fulfilled, Hore told The Wire, “No it didn’t, most likely because by then, better looking and better packaged hand sanitisers began to hit the market even from outside the state.”

He added, “We also didn’t pursue the matter because we wanted to get back to our core business. Producing hand sanitisers as a regular product would mean going through a long process of procuring licenses from the government, etc.” 

However, a close look at the supply list for hand sanitisers provided by NHM to The Cross Current – from March 18, 2020 to January 1, 2021 showed no supplier for the product from outside the state. It indicates that the state’s health ministry might not have gone seeking competitive rates for the product outside of the state but instead settled firmly for a company which seems to have a monopoly in the region and at a rate demanded by it.

Read: Before Lockdown, Assam Govt Gave ‘Urgent’ PPE Orders to Firms Linked to CM. Here’s How They Turned Out and
Assam CM’s Wife Says PPE Supply By Firm Was ‘CSR’, Silent on Contract Details

Additionally, the information provided in the NHM annexures revealed that yet another distillery, North Guwahati-based Mangalam Distillery, was also issued a work order for 70 lakh 200-ml bottles of hand sanitisers worth Rs 20,65,00,000 (Rs 20 crore 65 lakhs) on the very day when Surma Distillery bagged its order. Although, Mangalam Distillery failed to deliver the goods, the price at which the NHM approved its order for each 200-ml bottle is only Rs 29.50 – again, much lower than the rate approved for GRD Pharmaceuticals. 

The documents point at NHM receiving hand sanitisers from at least seven other Assam-based firms on April 2, 2020. The RTI replies cited the name of the firms, the date of delivery of the hand sanitisers to the NHM, and the quantity of bottles received, but do not mention the rate at which those sanitisers were procured by the health department, nor the quantity delivered in those bottles.   

What the annexures confirm is that GRD Pharmaceuticals carried out the largest supply of hand sanitisers to the health department. Between March 11 and May 29, 2020, the company supplied 36,600 bottles of 500-ml hand sanitiser bottles and another 500 of the 100-ml packs. 

While the rate of the March 18, 2020, ‘urgent’ order and the March 26, 2020 ‘urgent’ order for Handrub sanitisers to GRD Pharmaceuticals were approved at Rs 231.87 for a 500-ml bottle, the price for the rest at which the deliveries were made by the company – between March 11 and 18, 2020 and on May 29, 2020 –  could not be ascertained as NHM did not provide those specific work orders to us. 

However, in total, the RTI replies have shown that Dhanuka’s firm supplied 36,600 Handrub bottles to the state NHM and at least from two of the seven orders it can be confirmed to have received a high rate as part of the ‘urgent supply order’.  

Accusations of misappropriation of funds

Dhanuka’s firms have been at the centre of controversies during the course of the pandemic. Accusations against his firms for allegedly misappropriating funds in procurement of essentials to meet the COVID-19 challenge had surfaced in Assam in mid-2020. On June 24, 2020, the Assamese daily with one of the largest circulations in the state, Asamiya Pratidin, had flashed a front page article accusing Dhanuka and some other Guwahati-based businessmen of “running a syndicate” to provide COVID-related emergency supplies to the health department at an exorbitant rate. 

Two Guwahati-based civil society organisations – Assam Public Works (APW) and Durniti Virodhi Yuva Shakti (DVYS) – also pursued the matter. APW, on July 23, 2020, in an open letter to the then Assam chief minister Sarbananda Sonowal, demanded a probe into supply of six emergency items – N95 masks, three-layered masks, PPE kits, disposable gloves, hand sanitisers and melathin – by the two firms owned by Dhanuka along with some other local suppliers. APW accused them of running “a mafia” in the state health department “without the knowledge of the health minister”.

APW’s letter, published on July 20, 2020 on the front page of Asamiya Pratidin had particularly claimed that as many as 295 bidders had applied to the state government seeking the contract worth Rs 71 crore to supply those items. “Companies of international repute like Mafatlal and Apollo International had bid for those contracts to supply the items. However, violating the CVC (central vigilance commission) guidelines and GFR (general financial rules) guidelines, the state unit of NHM didn’t disclose who won the bid and didn’t upload the information on its site,” the letter reportedly said.

“Because of the, the common man in Assam remained in the dark as to who supplied those items. Non-disclosure of the name of the supplier is a clear violation of the rules of the Comptroller and Auditor General (CAG) on procurement of public goods,” the report read, quoting the letter.

In a press statement on July 24, 2020, DVYS had stated that while a 100-ml bottle of Handrub sanitiser produced by GRD Pharmaceuticals is sold by the company at a wholesale rate of Rs 29.46, it supplied 500-ml bottles of the same sanitiser to NHM at a whopping Rs 231.87 – Rs 84.57 more than what the price should have been. 

The rate quoted then by DVYS for the 500-ml bottle of Handrub matches the government record shared through RTI replies with The Cross Current

In response to those accusations attracting public scrutiny, former business associate of Sarma’s wife, Rajib Bora, who was also one of the suppliers of the ‘urgent work orders’ issued during the national lockdown by the health department, filed a case at the court of the civil judge Rajeev Kumar Deka, Kamrup (Metro), on July 24, 2020. The case was against APW founder Abjijit Sarma and the editor of a local channel, Pratibimba Live. Bora, who supplied PPE kits to the NHM, accused them of defamation and demanded compensation for it. 

The court continued to hear the case but clamped a temporary injunction, directing the defendants to “restrain from making any further alleged defamatory statement concerning the purchase of PPE kits and also to restrain opposite party 2 (Pratibimba Live) from broadcasting any defamatory news in respect of subject matter of the suit via any media as on July 23, 200 till next”.  

The last hearing of the case was on May 20, 2022.

When contacted, Abhijit Sarma told The Wire, “I can’t go into the details of the case with media anymore as there is now an injunction on the matter and the case is being heard at the court.”

Meanwhile, days after Sarma occupied the chief minister’s chair after the 2021 assembly elections, Ghanshyam Dhanuka and his father Ashok Dhanuka donated Rs 12 lakh to the CM’s Relief Fund for COVID-19 vaccination. During the first wave of the pandemic, the Dhanukas donated Rs 50 lakh to the state’s COVID-related fund, as per news reports

The Sarma regime has recently extended Assam Police security to Ghanshyam Dhanuka, a rare facility to a state-based businessman.