India in dispute over the price of condoms

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India in dispute over the price of condoms

By Jo in New Delhi

Published: March 2 2007 22:08 | Last updated: March 2 2007 22:08

The World Bank and the UK's Department for International Development

have refused to finance the Indian government's purchase of condoms

to fight HIV/Aids because of an alleged lack of transparency in

procurement procedures, the Financial Times has learnt.

The government now obtains condoms from local manufacturers such as

the state-owned Hindustan Latex, which supplies hundreds of millions

of contraceptives required under National Aids Control Program-III, a

five-year plan starting next month.

HIV prevention organisations are angry about the high cost of

government-procured condoms, saying that scarce funds are being

wasted in India, which has the world's biggest HIV caseload,

according to UNAIDS, with an estimated 5.7m carriers last year.

" Domestic preference is playing a role here that it wouldn't in other

countries, leading to a situation where India is paying 30-40 per

cent more than the world average, " said a senior international civil

servant running an HIV programme in India. " It is very frustrating

but the government says it's non-negotiable. "

The head of a non-governmental HIV/Aids body said: " Over a billion

condoms are being manufactured under government contract every year

at a price that is 25-40 per cent above the market price. It all

looks very ugly to me. "

K. & #8201;Sujatha Rao, director-general of the National Aids Control

Organisation, which runs the NACP-III, said she knew donors wanted

international bidders involved in the procurement process but quality

was a critical issue. " Korean condoms are very cheap but they are

quite suspect and are bound to be disastrous. I want good-quality

condoms, " she said.

The government is expected to contribute about $1bn of the total

$2.5bn cost of NACP-III. Spending on a condom access programme is

budgeted at $56m in 2007-08, a rate that is expected to increase

during the later years of the plan.

Jeff , a UK High Commission spokesman in India, said

procurement was an issue and DFID was not planning to finance condom

procurement in NACP-III. He added: " We are planning a division of

labour on this scheme and the Indian government is focusing on the

supply of condoms. "

The World Bank, which has not financed condom procurement before,

said in a statement that it proposed to continue the arrangement

whereby condoms were procured only with government funds.

The NACP-III programme still faces a considerable financing gap,

estimated at some $400m, which the Indian government had been seeking

to bridge in part by requesting external financial support for the

condom access programme.

http://www.ft.com/cms/s/1d194922-c8f9-11db-9f7b-000b5df10621.html