Officials dangle Shs720b jab deal to private firms

Officials at the Ministry of Health internally discussed and dangled in writing a proposal to buy 20 million doses of AstraZeneca vaccines at $200m (Shs720b) from private companies without a history of supplying the jabs.

The blueprint was mooted when Uganda was desperate to secure the life-saving doses and did not progress to action, the director general of health services, Dr Henry Mwebesa, said yesterday.

Our investigations, however, show that in one case, technocrats, on August 4, prepared and presented a letter of intent meant for private firms for the signature of Ms Anifa Kawooya, the State Minister of Health for General Duties.

The minister did not append her signature on the document, which she yesterday hinted was the responsibility of her political supervisor and substantive Health Minister, Dr Jane Aceng, and said “… if you have the letter, and it was written in my name, but it is not signed, that means it is not an official letter”.

Ms Kawooya said no action was ‘taken’ as a result of the letter because the government has in place a special purpose technical steering team, alternately called the Vaccine Acquisition Committee (VAC), chaired by Dr Mwebesa, to coordinate and harmonise Uganda’s jabs access.

Cabinet established VAC on July 19 – with its nine members drawn from the ministries of Foreign Affairs, that of Finance, and Health, as well as the Attorney General’s office, and the external spy agency.

It sat last Friday, and again on Monday, to deliberate, among others, on an August 11 letter by Covax Country Engagement Director Santiago Cornejo to Health Minister Aceng communicating the availability, through cost-sharing arrangement, of 30 million and 75 million doses of Sinopharm and Sinovac, respectively, for Uganda to buy.

The vaccines are planned to be delivered anywhere between October and December and at the lowest market prices, $5.5 (Shs19,000) per dose.

“We have a committee which deals in vaccine acquisition,” Ms Kawooya said in response to a question from this newspaper on why she withheld her signature on the August 4 letter of intention.

“I have heard [the] letter is non consequential, and it is in draft form, which needed more of the participation of the said people.  I refer you to the minister. Technical people came up with a document, but it is not official,” she added.

A letter of intent is a document detailing tentative understanding between different parties on a matter of mutual interest, pending its formalisation through a binding future agreement.

In the unsigned August 4 letter of intent addressed to AstraZeneca PLC, and referenced ADM 80/105/01 and titled ‘supply of AstraZeneca vaccines’, officials noted that Uganda was scouting for 20 million doses of the vaccine and willing to pay $10 (Shs36,000) per dose, in total costing $200m (Shs720b).

They added that whereas the country understands the high demand for, and difficulty in securing the vaccines, it ‘requests and requires delivery of the intended vaccines to be as quickly as it may be possible’.

“The government of Uganda will provide to AstraZeneca and its nominated officers the requisite proof of funds for the entirety of the purchase price,” the unsigned letter reads in part.

Whereas Ms Kawooya did not mention it in her comments to this newspaper, other sources intimated that she declined to endorse the letter because she felt the proposal was irregular, and that she was being misled to sign it.

For instance, under the non-disclosure provision in the letter of intent, it is noted that ‘neither the government of Uganda, nor the AstraZeneca PLC, will disclose whether privately or publicly information on the proposed transaction contemplated by this letter of intent prior to the execution of the transaction agreement without the prior written approval of the offer, which approval will not be unreasonably withheld or denied.’

Ministry of Health officials either avoided or were at pains to explain the legal basis on which they discussed the proposal to issue letters of intent, something they asked the VAC meeting on Monday to recommend to the Health minister.

Mr Jimmy Ameny, the procurement & SCM specialist at Uganda National Expanded Program on Immunization (Unepi), presented the proposal as the committee reviewed minutes of its last Friday meeting, sparking a heated debate.

He named M/S Beyler PVT Ltd and M/S Rhart Solutions as two companies that they scrutinised and recommended for letters of intent out of 10 that expressed interest, unsolicited, to supply vaccines to Uganda.

Members, among them Uganda’s Permanent Representative to the United Nations Mission in New York, Amb Adonia Ayebare; Prof David Serwadda, the chairperson of the Vaccines Advisory Committee, Makerere University’s Prof William Bazeyo; and Mr Moses Droma Onzima, the deputy director for operations at the External Security Organisation (ESO), were vocal in opposing the letter of intent proposal.

Amb Adonia argued that there was no justification to consider the offer of letters of intent to private companies when Covax, from which Uganda received all the 1.7 million doses so far administered in the country, had made available to Uganda in excess of 100 million jabs from which to buy.

Details of the discussions show that Prof Bazeyo warned, while chuckling, that he did not want to end up imprisoned in Luzira and, so, would not endorse the idea of issuing the letters.

According to sources familiar with the matter, Mr Droma of ESO questioned why the private companies wanted letters of intent from Uganda, suggesting they may possibly be ‘hiding something’.

He reportedly submitted that doing so required background checks or due diligence on the firms and it would be costly and unnecessary for Uganda --- which has under 40 diplomatic representations abroad – yet the generous Covax offer was up for grabs with a dose at $5.5 (Shs19,000), the lowest. 

This newspaper understands that Mr Ameny had misinformed VAC members that the 105 million vaccines were not for Uganda only, but Anglo-phone speaking countries, but buckled when challenged to show his reference in Mr Cornejo’s August 11 letter.

During the Monday meeting, the Solicitor General, Mr Francis Atoke, reportedly guided that whereas a letter of intent is legally non-binding, there is in law the principle of “legitimate expectation” – that one party’s action gave the other a belief or expectation, meaning firms given such letters could in future drag Uganda to protracted and expensive overseas arbitration.

After notable Ping Pong, VAC recommended that Uganda confirms with Covax its interest to procure 21 million doses, which Health ministry officials chopped to 18 million while submitting the response on Tuesday, hours before the deadline, explaining later that they expect additional vaccine supplies of nine million doses from Johnson&Johnson, and a combined 10 million doses of AstraZeneca, Moderna and Pfizer.

Dr Mwebesa, who doubles as the chairperson of the nine-member Vaccine VAC, yesterday described the letter of intent submitted for minister Kawooya’s assent as a ‘draft’ he said should be disregarded as its contents have already been overtaken by new developments.

The new development he referenced is the offer on August 11 by Covax – the World Health Organisation-established facility for poor countries to access vaccine – of 105 million doses of Sinovac and Sinopharm vaccines.

“Before we got the offer [of 105 million doses] from the Covax facility, we were looking at some of those who had submitted their proposals and that was one of the firms with the lowest price and was directly linked to the manufacturer. But we had also not cleared it because it had gaps. We never sent it [the letter of intent],” he said.

However, this newspaper has seen an August 10 letter by a Korean company, bnr Korea, addressed broadly to the “Republic of Uganda, Ministry of Health”, proclaiming its readiness to supply 20 million doses of AstraZeneca vaccines at $10 (Shs36,000) per dose, which reflects striking similarity to the figures contained in the letter prepared for minister Kawooya’s signature.

“However,” a one Sunghwa Jung, who signed the letter, wrote “we cannot guarantee the price for the next order as it is anticipated that the price will increase in nearer time [sic].”

Dr Mwebesa yesterday said he was unaware of the bnr Korea’s letter.

Background

Procurement issues

Questions lingered about compliance, or the lack thereof, with procurement rules once Health ministry officials disclosed that the private companies they scrutinised, presented themselves unsolicited to supply vaccines that the government itself had failed to secure directly from manufacturers. 

Mr Benson Turyame, the Public Procurement and Disposal of Public Assets (PPDA) executive director, in response to our inquires, said unsolicited bidding is practiced in the procurement world, but “currently, there is no provision in Uganda’s law [about it]”.

“You may see that there is gap in government services and then you come up with a proposal to address that problem, even if government has not identified it as an issue, then you could do unsolicited bidding,” he said, adding that the government is obliged in such circumstances to open up the bidding process.

In a hastily-organised press conference at the Uganda Media Centre, Dr Mwebesa described this newspaper’s exposé yesterday under the headline, ‘health officials hide offer for Covid-19 jabs’, as “misleading and inaccurate”.

He said they had received and scrutinised 10 private companies that expressed interest to supply vaccines, as the newspaper reported, but they never gave a deal to any.

The Daily Monitor story reported that the ministry had presented two companies --- M/S Beyler PVT Ltd and M/S Rhart Solutions --- to VAC to recommend to government for issuance of letters of intent, and not that the deal had been signed. The paper stands by its reporting.