Manila renegotiating 'disadvantageous' 2014 dialysis contract flagged by COA

Katrina Domingo, ABS-CBN News

Posted at Aug 26 2021 06:42 PM | Updated as of Aug 26 2021 07:35 PM

MANILA - The city government of Manila on Thursday said it is renegotiating a dialysis contract which gives the local government only a quarter of revenue despite shouldering millions of expenses after the Commission on Audit (COA) flagged the agreement as "disadvantageous."

Under the city government's dialysis joint venture agreement with B Braun Avitum Philippines Inc (BBAPI), the local government is only entitled to receive 25 percent of revenue "until 2029 or 15 years," said Cesar Chavez, the mayor's chief of staff, in response to a media query about the questionable partnership signed in October 2014.

The agreement covers the dialysis operations at the Gat Andres Bonifacio Memorial Medical Center.

"The City Legal Office is proposing a 60-40 sharing scheme. We believe this is doable and advantageous to the government," Chavez told reporters in a text message.

Under the 2014 agreement, the city government also pays for hemodialysis supplies used in the dialysis center being operated by B Braun, he said.

"The City Government heeded COA’s initial recommendation that the City take over procurement of the items which are not directly used or not standard items used or required for the dialysis treatment," he said.

"Simula ng umupo si Mayor Isko [Moreno Domagoso], hindi nagbayad ang LGU Manila sa hemodialysis supplies (consumables) worth P53.8 million na sinisingil ng BBAPI," he said.

"They cannot show the basis of the claim. Kaya naka-hold ito," he said.

Chavez said it was Mayor Isko Moreno Domagoso who "requested COA to review the contract and all financial transactions in relation thereto" after the current city government "reviewed all previous contracts entered into during former Manila Mayor Joseph "Erap" Estrada's administration.

"The City Government heeded COA’s initial recommendation that the City take over procurement of the items which are not directly used or not standard items used or required for the dialysis treatment," Chavez said.

Two weeks ago, the COA "denied the motion for reconsideration filed by BBPAI... to enforce the 75-25 sharing scheme and for the local government unit to pay for the consumables," he told ABS-CBN News.

The City Legal Office and BBAPI officials "still need to amend the joint venture agreement," he said.

"If BBAPI is not amenable to the changes as per COA’s recommendation, the City Legal Office shall initiate the immediate termination of the contract," he said.

Last year, several senators called B. Braun Avitum a "conduit" of anomalies within the Philippine Health Insurance Corp (PhilHealth) after a Senate investigation found that it received millions of COVID-19 funds from the state insurer even when it was not catering to coronavirus patients.

B. Braun Avitum Philippines was accused of receiving some P45 million through PhilHealth's interim reimbursement mechanism (IRM), while hospitals filled with COVID-19 patients have yet to be refunded for their coronavirus-related expenses.

The company denied allegations, saying that "it has not engaged in any illegal or unethical activities."

"As a medical technology company with a global history of 180 years and having served the Filipino people for 34 years, B. Braun Avitum holds itself strictly to the highest standards of integrity in all its business dealings," it said in a 2020 statement.

"In each and every one of our business transactions, we adhere to the most stringent standards of integrity and professionalism," it said.

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