New Contract for Liquid Oxygen With Increased Price, Corruption Scam at BRD Medical College?

Even after Gorakhpur's Baba Raghav Das (BRD) Medical College discontinued supply of liquid oxygen from Pushpa Sales Private Limited, and started taking it directly from INOX Air Products Ltd, the price instead of going down, has significantly gone up.  

The medical college earlier used to purchase liquid oxygen from the Lucknow-based company Pushpa Sales at the rate of Rs. 16.50 per litre. However, after the tragic incident in August 2017 involving deaths of close to 60 children – reportedly due to shortage of oxygen – the medical college now has directly tied up with INOX. INOX is a Rajasthan-based company which supplied liquid oxygen to Pushpa Sales in the first place. However, after the tie-up, the price paid by the college has gone up from Rs. 16.50 per litre to Rs. 19.39 per litre, which has raised many questions about the deal.

Earlier, Pushpa Sales acted as a middleman between INOX and BRD medical college for the supply of liquid oxygen. Its proprietor Manish Bhandari purchased the gas from INOX, and sold it to the BRD College at the rate of Rs. 16.50 per litre, which obviously included the margin for the profit of Pushpa Sales. Bhandari was arrested after the deaths of the infants, and the college made the deal with the INOX for its oxygen supply. After eliminating the middleman and its margin, the price of the liquid oxygen should have ideally gone down. However, it went up to Rs 19.39 per litre.

Speaking to Newsclick, Prahlad Yadav, district president, Samajwadi Party, who had accused the Yogi-led BJP government of corruption in this case, said, "Pushpa Sales was getting commission on per litre basis when the amount was Rs. 16.50 per litre including GST. When BRD started trading directly with INOX, the price was increased by Rs. 2.89 per litre. When you start buying liquid gas directly, and you do not have any middleman, how can the amount be hiked?"

Yadav further claimed that a medical college from Lucknow buys liquid gas at the rate of Rs. 11.00 per litre from another Rajasthan-based company. “Why could the BRD Medical College not purchase it at this rate? Why do they need to pay extra?” questioned Yadav. 

A doctor from the BRD Medical college, who chose to remain anonymous, said, "Every month, the medical college needs 1.20 lakh to 1.50 lakh litre liquid oxygen and a single truck carries thirty 30,000-40,000 litre. Four to five trucks come every month. So you can imagine the scale of the corruption that is taking place."  

However, another source told Newsclick that the increased diesel and electricity rates are the main reason behind the shot up price of the liquid oxygen. “Earlier, the GST imposed on it was five per cent, and now, probably, they are charging 12 per cent GST. That's why the price got increased.”

However, there was no explanation for the probable decrease in the price after the elimination of the middleman. 

Newsclick also approached the Director General, Medical Education (DGME) KK Gupta. He said, "There is no point of discussion over the same issue repeatedly, as the old contract has been signed in 2014 when there was no GST implications, and the new contract has been signed in 2017 with GST and new price of diesel.”