The Hindu Business Line : World Bank debars two Indian firms

Mumbai, July 17 The World Bank has declared Delhi-based Nestor Pharmaceuticals Ltd (Nestor) and Mumbai-based Pure Pharma Ltd “ineligible” to be awarded bank-financed contracts.

Both firms were found to have engaged in “collusive practices” in connection with the bank-financed Reproductive and Child Health Project (RCHI) in India, a note from the bank said.

Allegations

Nestor has been debarred for three years, while Pure Pharma is debarred for one year. The decision to debar the two companies was based on evidence from an investigation by the World Bank’s Department of Institutional Integrity (INT) into allegations of impropriety in the procurement of pharmaceuticals under the RCHI project. This was the first case heard by the bank’s Sanctions Board, the note said.

Both Nestor Pharma and Pure Pharma did not return calls made by the paper.

Pharma industry representatives, who have participated in similar health-related projects in the past, said that such projects could run into few hundred crore worth of medicines annually. In this case, it may have comprised gynaecology drugs, birth-control products, vaccines for inoculations etc.

Evidence

The RCHI programme was designed by the Centre to help deliver medical services to vulnerable citizens, said Mr Praful Patel, World Bank’s Vice-President for South Asia.

“The actions of both companies harmed the very people this project was meant to help,” he said in the note.

The Sanctions Board, a recently constituted body inside the World Bank Group comprising external and internal members, weighed the evidence presented by INT and that provided by the firms.

It found both firms had engaged in misconduct, the note said. Mr Danny Leipziger, Vice-President of the World Bank Group and Chairman of the Bank’s Sanctions Board, said that the decision was inline with the bank’s mandate to ensure that its funds are properly utilised. “…in this case, it was found that the two firms had behaved improperly and the requisite penalties were imposed,” he said.