In a huge setback to Bharat Biotech’s plan to sell Covaxin abroad, the Brazilian government suspends a $300-million deal with Bharat Biotech.
The Brazilian government on Tuesday halted its contract to import 20 million doses of the Indian vaccine and Brazil’s minister of health Marcelo Queiroga announced that the government has “decided to suspend the contract on the recommendation of the federal comptroller general (CGU)”, which is investigating the alleged irregularities in the contract.
Presently, there is a thriving scandal around the contract closing in on Jair Bolsonaro, President in a multi-million-dollar case and the name of Prime Minister Narendra Modi has been drawn into Brazil’s parliamentary commission of inquiry (CPI) which is investigating the government of President Jair Bolsonaro for its “acts of commission and omission” during the pandemic.
The contract between Brazil and Bharat Biotech, negotiated and signed by a local company called Precisa Medicamentos, has been in the center of a political storm for days as it became the main point of the parliamentary commission of inquiry (CPI) investigating the government’s handling of the pandemic.
The Indian company signed a pact with Precisa Medicamentos on January 12, 2021. Just 40 days later, on February 25, Precisa Medicamentos signed a contract with the Brazilian government for the sale of 20 million doses. At the time of signing the contract, Covaxin had not been approved by Brazil’s National Health Surveillance Agency (ANVISA). Yet, its purchase price was agreed at $15 a dose, the highest paid by this country for any of the six vaccines contracted so far. Rejected by ANVISA on March 31 and then approved for limited import with strict conditions on June 4.
The Indian vaccine has been splattered into a murky controversy for months shaking the Brazilian government and ripping apart the reputation of Bharat Biotech with Prime Minister Modi’s name also being dragged into this 300 million dollar scandal.
Earlier, a health ministry official, Ricardo Miranda, certified at the senate that he and his brother, federal deputy Luis Miranda, had informed the president about the serious irregularities in an invoice sent by Madison Biotech, an offshore company from Singapore, the CPI turned its focus towards Bolsonaro and Bharat Biotech, whose owner Dr Krishna Ella is also the founding director of the firm which operates from the ground floor of a two-story house in Singapore.
Late on Tuesday night, CNN Brasil showed some parts of the CGU report which had forced the government to suspend the contract. In the 11-page official report, as per CNN Brasil, the focus of the investigation is the invoice from Madison Biotech. “Five points are listed to justify the suspension: Attempt to make advance payment, without contractual provision; possible payment through a company not a signatory to the contract; non-compliance with contractual deadlines; non-justification of price; and breach of contract by Bharat/Precisa as reported by ministry of health,” said the report, which largely seems to put the blame on Bharat Biotech, its offshore partner and its Brazilian representative.
According to sources in Brasilia, the people close to the presidential palace want to wipe their hands off the deal. “The question is not if the government wants to terminate the contract, the question is when they will cancel it. It is taking time because the contract is under so many ongoing investigations,” said a senior official, speaking on the condition of anonymity. “Nobody wants anything to do with this vaccine anymore. It is toxic.”
The probe is head on and already the senate are calling it CovaxinGate, and this news is dominating the television screens in Brazil. Ricardo Miranda, the health official who exposed the request for $45 million advance payment sent by Madison Biotech of Singapore, is now being treated as a whistleblower by CPI; and the invoice he and his brother took to Bolsonaro with their complaint opened avenues to allow investigation into corruption in the India-Brazil 300 million dollar deal.