MUMBAI: Nearly Rs 700 crore from Maharashtra’s public health department meant for procurement of medical supplies is lying unused with Haffkine Biopharmaceutical Corporation Ltd, which until recently, was responsible for purchases for government hospitals. Several hundred crores disbursed by the state’s medical education wing are similarly lying idle with Haffkine.
An official estimated that over the last four years, Haffkine may not have managed to purchase drugs and equipment worth Rs 2,500 crore. “A lot of this money has been returned to respective departments, but the fact remains that the state miserably failed to empower Haffkine which led to suffering for poor patients,” a former dean said.
The recent surge in mortality at government-run hospitals across the state has thus underscored the appalling standards of resource management within the bureaucracy in Maharashtra’s health department.
Until early this year, Haffkine had the responsibility for procuring medicines, consumables, medical devices, and necessary supplies for government-run hospitals and medical colleges. Any institution in need of medical goods was required to transfer funds to Haffkine, which would initiate the tenders for purchases. State-run medical colleges had to transfer 90% of procurement funds to Haffkine.
However, Haffkine struggled to establish an efficient system. Funds periodically transferred to its account are now tangled up. Officials from the departments of public health and medical education have been grappling with the challenge of recovering these sums from Haffkine’s books, they told TOI.
Recently, a team from the Directorate of Health Services, which operates under the public health department, visited Haffkine’s Parel facility to physically review files for clarity on whereabouts of the funds. Initial estimates indicated that overall Rs 700 crore of the department’s funds are tied up, the Haffkine teams allegedly could not trace Rs 150 crore during the review.
A senior official in the know explained that the money is stuck due to multiple issues. Haffkine used to issue joint tenders on behalf of both public health and medical education wings. “The accounts department is currently unable to give a breakup of which items were procured for which department and the corresponding expenditures,” said the official. Even for items that have been purchased, the bills are not all in order. “The crux of the problem is that Haffkine was functioning without a fully qualified accounts team despite handling thousands of crores of funds,” said the official.
The Haffkine debacle has prompted medical colleges to scrutinize their financial dealings. For instance, the medical education wing discovered that in fiscal year 2022-2023, JJ Hospital alone transferred Rs 14 crore to Haffkine but only received medical items valued at Rs 5 lakh. Another dean said they had paid Haffkine more than Rs 3 crore for MRI and CT machines four years ago but had yet to receive the equipment. While the colleges are reclaiming the funds from Haffkine, the process entails a cumbersome route involving reimbursement to government and RBI accounts through challan.
While many older purchase orders have been shifted from Haffkine to the newly established Maharashtra Medicine Procurement Authority, even the latter may take a while to actually start purchasing. Milind Mhaiskar, additional chief secretary of the public health department, called these accounting hiccups that should be sorted out shortly.


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