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Fact check: Did states fail to use PM-Cares funds allocated by the Centre to build oxygen plants?

India’s oxygen crisis has triggered a political blame game.

As hospitals in India run out of medical oxygen in the midst of a massive second wave of Covid-19, a political war has broken out over who is responsible for the crisis.

Actor Kangana Ranaut tweeted on Saturday asking for accountability from Delhi and Maharashtra chief ministers for their failure to use the funds allocated by the Centre from the PM-Cares corpus for building PSA oxygen plants.

Kangana Ranaut

Several news reports also cited anonymous sources in the central government blaming state governments for the delay in the installation of these plants.

These claims are wrong.

Did the Centre allocate funds to states for building oxygen plants?

No, the Centre did not allocate any funds to states for the installation of oxygen plants in district hospitals. A central agency under the Union health ministry was given the charge of commissioning the oxygen plants, which use the Pressure Swing Adsorption technology and are therefore referred to as PSA oxygen plants.

The Central Medical Services Society floated a tender on October 21, 2020, inviting bids for the installation of 150 PSA oxygen plants across 14 states. Twelve plants were added later to the list. The funds were to come entirely from PM-Cares, or the Prime Minister’s Citizen Assistance and Relief in Emergency Situations fund, which is controlled by the Centre.

Here it is important to note that the tender was floated eight months into the pandemic. The Centre wasted eight months to start the process.

Who is responsible for the installation of the oxygen plants?

The Central Medical Services Society, a body under the Union ministry of health, was responsible for evaluating the bids, checking the eligibility of bidders, fixing prices, selecting vendors and ensuring the selected vendors delivered the goods.

The selected vendors were responsible for the installation of the oxygen plants in the district hospitals.

The role of the state governments was limited to ensuring the district hospitals had completed the civil and electrical work required for the plants. The district hospitals had to provide a site readiness certificate to the vendor.

Who is responsible for the delays in plant installation?

As noted earlier, a major part of the delay was caused by the Centre – it did not start the process until October 2020, squandering eight crucial months that could have been used to build the plants.

The tender gave bidders time until November 10, 2020 to submit their bids. The final contracts were given in December, vendors and district hospital officials told Scroll.in. This means the actual work on installing the plants could only start ten months into the pandemic.

According to the tender document, the vendor was expected to supply the goods – that is, install the plant – “within a minimum required period of 45 days” or as stipulated in the purchase order.

It takes four to six weeks to install a PSA oxygen plant, industry executives told Scroll.in.

However, four months after the contracts were given, only 33 of the 162 PSA oxygen plants have been installed.

Hospital officials across many states said the companies that had won the contracts were untraceable and unresponsive. In fact, one of the three companies that won the contracts was blacklisted by the CMSS on April 13.

The executive of another company, however, blamed the hospitals for delays in completing the civil and electrical work required to get the site ready for installation.

Did some states witness longer delays than others?

On social media, many ruling party supporters like Ranaut have alleged that non-BJP ruled states have seen more delays than others in getting the plants up and running.

The political war has been most acute around Delhi, where hospitals have run out of oxygen and patients have denied.

On Sunday, unnamed central government officials were quoted in an Indian Express report saying that the Delhi government had failed to furnish site readiness certificates for the PSA oxygen plants on time.

The Delhi government denied this, saying the vendor who was given the contracts for hospitals in the national capital had run away. It pointed out that even the central government-run Safdarjung Hospital, on the list of the 162 hospitals, is yet to have its PSA oxygen plant up and running.

Of the 162 PSA oxygen plants, the largest number (14) were sanctioned for BJP-ruled Uttar Pradesh. Scroll.in called officials in all 14 district hospitals in the state. Not even a single hospital reported having an operational plant. After our report was published, the health ministry itself noted only one of the PSA oxygen plants had been installed in the state.

Does this mean states have no responsibility for the oxygen crisis?

The Centre is responsible for the 162 PSA oxygen plants being built out of the PM-Cares funds. But nothing stopped the states from commissioning their own PSA oxygen plants.

These plants come at a low cost – the installation budget for 162 PSA oxygen plants is Rs 201 crore, which works out to an average of Rs 1.25 crore per plant. The capacity varies from 100 litres per minute to 1,000 litres per minute. A plant with the capacity of 1,000 litres of oxygen per minute can simultaneously cater to 100-160 patients on oxygen support.

Madhya Pradesh, which barely has any oxygen production capacity of its own, placed purchase orders for 13 PSA oxygen plants on April 14. Meanwhile, unnamed officials of the Delhi government have claimed that it cannot set up oxygen plants in the capital because of stringent pollution control norms.
This is misleading. The Delhi government could have set up PSA oxygen plants, as could have major hospitals. Last week, in fact, the state government-run Sassoon Hospital in Pune, Maharashtra, announced it was setting up its own PSA oxygen plant.

Would the PSA oxygen plants have averted India’s oxygen crisis?

India’s daily oxygen production capacity is 7,200 metric tonnes and the medical oxygen requirement as of April 21 was 8,000 metric tonnes, according to a submission made by a central government official in Delhi High Court.

This means even if the country uses up its entire oxygen production for medical use, as the government has now decided to do by banning use of oxygen for industrial purposes, the country will still face a shortfall of 800 metric tonnes, though it also has a reserve.

The 162 PSA oxygen plants together have a daily capacity of 154 metric tonnes – minuscule compared to the current shortfall.
But had the country installed PSA oxygen plants on a war footing, the situation would have been different. For an outlay of Rs 2,000 crore, the country could have added 1,540 metric tonnes of additional daily medical oxygen capacity.

Significantly, by adding on-site oxygen manufacturing capacity, the country could have reduced the need for the massive logistical exercise currently underway to move liquid oxygen in tankers from surplus states, even import it from other countries.

On Sunday, as more hospitals across the country reported grave oxygen shortages, the Centre announced that it will set up 551 PSA oxygen plants across India.