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… Audit findings show lapses in contract award and implementation 

Dechen Dolkar  

JDWNRH awarded the contract for the installation and operation of radiation therapy to Care Australia, Kolkata and signed the service agreement for 12 years on June 17, 2016.

However, four years into operation, in August 2021, the national referral hospital in Thimphu suspended the radiotherapy services after the treatment reportedly did not benefit any of the patients who had received the services.

As per the agreement, JDWNRH has to pay INR 1.3M as a composite fee per month, a fixed rental charge of INR 1M a month for the installation and operation of a linear accelerator and INR 125,000 per month for the service of a Surgical Oncologist who would be deputed to JDWNRH for one week every month.

The agreement also mentions that the fees payable are subject to increase after the expiry of every year by 3 percent of the last month’s composite fee.

In more than five years, the hospital paid Nu 117.9M to Care Australia as service charges for radiation therapy services.



Kuensel learnt that a review of MoU, board meetings and other related documents for the establishment of radiation therapy service revealed that detailed need analysis and proper feasibility studies were not conducted.   

As per the minutes of the 3rd board meeting held on July 30, 2015, the board had asked the management to study the pros and cons and detailed cost-benefit analysis for taking appropriate and informed decisions. Despite no such studies being conducted, the 4th board meeting held on May 18, 2016, approved the establishment of radiation service in JDWNRH.

Section 8.4 of the National Health Policy 2011 states that no new health technology should be allowed until assessment and evaluation for its safety, efficacy, quality, indication, and cost-effectiveness are conducted by the health technology assessment panel.

It was also observed that due process for executing any memorandum of understanding or agreement with external agencies in line with the Rule of Treaty Making Procedure 2016 was not followed.

It was learnt that the board and JDWNRH management had directly awarded the Service contract to Care Australia for the installation and operation of radiation therapy service without following procurement norms in deviation from Clause 4.1.1.2, chapter IV of the Procurement Rules and Regulations 2009.



The audit findings pointed out that forgoing important aspects of need analysis and pre-feasibility studies and other due diligence requirements had contributed to taking injudicious decisions by the board, resulting in the loss of huge government resources.

It was also learnt that the agreements were not delivered as per service agreements like fellowship training in radiation Oncology in India (tuition fee for the course was supposed to be paid by the service provider) was not provided and no surgical oncologist was deputed to the JDWNRH on surgical duties for one week every month as required by the service agreement.

It was also pointed out that the laxity on the part of management to enforce contractual terms to deliver agreed services from the service provider. However, the management continued to pay huge monthly charges to Care Australia without receiving the agreed deliverables as per the service agreement.

Clause 1.2 of Article 1 of the service agreement states that the contract will enter into effect from the date the first patient is treated and will remain in effect until the expiry of the term (12 years) from the said effective date unless terminated earlier in accordance with the provision of the contract.



However, in deviation from the agreed service terms, the JDWNRH paid Nu 11.6M to Care Australia before it started treating the patients using the radiation service. The treatment of the patient using the radiation service commenced in January 2018.

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