Mumbai/Hyderabad: A charity run by discredited Satyam Computer Services Ltd former chairman B. Ramalinga Raju has come under scrutiny as two non-governmental organizations (NGOs) have said in court that the charity was used to grab land and overcharge the government, which funded it through its National Health Mission.
The emergency ambulance service, called Emergency Access Foundation (Emri) is modelled on the 911 service provided in the US during medical emergencies. Emri owns 1,500 ambulances and employs 12,000 people, according to its CEO Venkat Changavalli.
The registrar of the Supreme Court on Wednesday directed the Union of India, 12 state governments and Emri to respond by 18 February to a petition filed by Ambulance Access Foundation Ltd and Transparency in Contracts. This happened even as some state governments, who deal with Emri, told Mint that they are mulling whether to terminate existing contracts, rivals allege that the charity has violated several official rules and its bankers say that they are keeping a close watch on its accounts.
Quite unlike the US 911 service, Emri was dependent on generous government funding. The petitioners say that 95% of the costs incurred by Emri— including both capital and operating costs—were borne by government agencies. The two NGOs add that most contracts were given out to Emri without proper tendering, while in some cases tenders were tailor-made to benefit Emri.
The public interest litigation (PIL) was filed on 24 October based on information running into 25,000 pages collected with the help of 504 applications using the Right to Information Act. Notices were issued by the Supreme Court on 17 November, well before the Satyam accounting scandal came out into the open.
“Why does Emri require 20 acres of land in Ahmedabad, Gandhinagar or Bangalore to run a control centre?” asks Subrato Das, executive trustee and CEO of Lifeline Foundation, a Vadodara-based non-profit ambulance service that began in 2002 and now operates in six states. “Every asset that Emri uses, including the real estate, is owned by the government,” counters Changavalli.
Even as other charities running ambulances bristle at what they perceive as unfair deals to benefit Emri, other stakeholders are responding to the questions raised by the two petitioners in court.
Mint learns that a few states —including Maharashtra, Punjab and Meghalaya—are now thinking of withdrawing from contracts they had awarded to Emri, especially after the 7 January admission by Raju that he had fudged Satyam’s accounts.
In a phone interview with Mint, Changavalli denied that any of the eight states that use Emri services are backing out. “We are operating in eight states—Assam, Gujarat, Karnataka, Andhra Pradesh, Tamil Nadu, Goa, Maharashtra and Orissa,” he reiterated.
However, S.B. Chavan, director (health services), Maharashtra, repudiated this: “The state ministry of heath was in discussion with Emri to sign for emergency ambulance service in a private-public partnership project. Though we were expected to sign the project this month, it has been put on hold in the wake of the public interest litigation.” The state government, which operates a fleet of about 1,000 ambulances in 400-odd hospitals and public health centres, wanted to improve services by partnering with private initiatives such as Emri. It has an annual budget of Rs120 crore for this.
Gujarat was the first state in the western region to sign a public-private partnership with Emri. The state had inaugurated this Rs300 crore project in August 2007, and now claims to operate nearly 1,000 ambulances. Mint could not immediately verify whether the state is reviewing the project in the wake of the PIL. Rita Twetia, health secretary of Gujarat, was not available for comments as the state secretariat was closed on Wednesday for Makar Sankranti.
“Emri was registered in 2005 and without any experience of running an ambulance service they became the nodal agency for the Andhra Pradesh government. There is total lack of transparency. Rajasthan and Tamil Nadu went for a tendered bid last year. The Rajasthan government came out with advertisements that said any organization with a turnover of Rs5 crore, having 200 ambulances and a contract from one Indian state can bid. This means they cut off every player globally except Emri. The Tamil Nadu government went a step ahead and their ads said any NGO with a turnover Rs25 crore, a minimum of 400 ambulances and two contracts from Indian states can bid, thus limiting it to Emri. The Punjab government came up with a request for proposal, an exhaustive document, which said the private partner has to have technology to have communication facilities from Chandigarh, to Emri Hyderabad,” said Das of Lifeline Foundation, which began operations in 2002 and operates in six states. Mint could not independently ascertain that veracity of these claims.
Emri’s Changavalli retorted that Emri will reply to every charge made in the PIL. “The matter is sub judice now,” he added. Mint has learnt that some banks have tightened lending to Emri. This too was denied by Changavalli. Mint could not reach Sanjay Kshirsagar, CFO of Emri.
One of Emri’s bankers said the ambulance service provider’s account is being closely monitored. “The bank has issued an overdraft facility of about Rs18 crore and a term loan of Rs18 crore to the company. They run savings account with us, they depend on cash for running their daily operation. Freezing of accounts will affect their operations,’’ said Parthasarthy Mukherjee, president (credit) at Axis Bank Ltd. “We are constantly monitoring the account.’’
Ravi Krishna, director at Ambulance Access for All Foundation, a private ambulance service, said there were other flaws in Emri’s operations. “Most of these ambulances are highly equipped and when you have that much equipment, there are some procedures that come under schedule H of the Drugs and Cosmetics Act and you have to be listed in the schedule to administer those drugs. What Emri has done is that they have trained science graduates for 50 days and allowed them to administer these drugs. These people are not qualified to administer schedule H drugs. In violation of the norms, Emri is conducting an emergency service where drugs are being administered and the government is funding it. How can the government fund something that is in violation of its own rules?”
“We also run an ambulance service and we have a 2,500 sq. ft office in Mumbai and that’s all it takes to run close to 90 ambulances in two states. If you look at Emri, every state government is giving them 10-20 acres of land. But why do you need so much land to run an ambulance service?” Krishna asked, repeating a question that several other ambulance service managers ask. Krishna and Das represent outfits that compete with Emri.
C.H. Unnikrishnan, Anita Bhoir contributed to this story.