The Directorate General of Health Services (DGHS) procurement scam in Delhi has exposed shocking cost inflation of 200 to 500 per cent on medical supplies and equipment, according to an FIR registered by the Delhi Anti-Corruption Branch (ACB). The scam, valued at approximately Rs 600 crore, involves inflated bills for items such as portable X-ray machines, bed sheets, C-Arm radiological equipment, and Oral Rehydration Solution (ORS).
The FIR, accessed by The Tribune, details a 230 per cent inflation on portable X-ray machines, 200 per cent on bed sheets, 340 per cent on C-Arm equipment, and 500 per cent on ORS. Two individuals have been named: Dr Vinod Ranga, former Head of Office for the Central Procurement Agency (CPA) at DGHS, and Rajiv Rangila, a supplier and liaisoner. Ranga was arrested by the ACB on Thursday.
Cartelisation and Manipulated Tenders
The complaint, filed at the instance of the Delhi Vigilance Department, alleges that the group promoted cartelisation, connived with government officers, manipulated tenders, and siphoned off hundreds of crores. Rangila is accused of creating fake companies—F Med Devices, Technocrats, Raj Shree, Ashi Surgical and Pharmaceuticals, and M Sahib and Sons Pvt Ltd—which were declared authorized distributors by pre-decided manufacturer companies.
According to the FIR, Rangila prepared tender documents with skewed restrictive specifications in collusion with the manufacturer and supplied them to Ranga, who then forwarded them to the tender committee. The specifications were forcibly approved using threats of action against committee members who resisted. Once tenders were uploaded on e-procurement or GeM portals, Rangila's fake firms bid with abnormally high eligibility criteria to deter others. Despite lacking turnover or experience, his firms qualified while others were disqualified without reason. Technical sheets prepared by Rangila received DGHS approval within hours, and bids were opened secretly with orders issued manually the same day.
Violation of GeM Rules and Payment Irregularities
The FIR notes that although GeM rules require online work orders, tenders were falsely shown as active or under process on portals even after being awarded. Fully paid tenders appeared pending online, hiding awardees and rates from the public. Meanwhile, earlier medicine suppliers remained unpaid for two years, while Rangila-linked tenders received same-day or next-day payments since October.
For example, the procurement of 448 portable X-ray machines was manipulated by initially floating a bid for only two machines to discourage competition. Subsequently, an order for 448 machines was awarded to F-Med Devices, the only technically qualified bidder. The Prorad Atlas machines, manufactured by Prognosis, were procured at Rs 33 lakh each, despite the manufacturer allegedly supplying the same model to other government departments for around Rs 10 lakh. This resulted in payments of Rs 148 crore for machines allegedly worth no more than Rs 45 crore. The GeM portal continues to display the tender as active despite completion.
Inflated Bed Sheets and Linen Procurement
Bed sheets, pillow covers, and other linen items were procured at highly inflated rates. Bed sheets were purchased at Rs 450 each, although the same manufacturer allegedly supplied identical products to AIIMS and other government institutions for around Rs 150. Only three companies linked to the same owner qualified, while other bidders were rejected. Hospitals were later directed to raise fictitious demands, and procurement, supply, and payment were completed in an unusually short period. Payments of Rs 75 crore were made for goods allegedly worth Rs 25 crore.
C-Arm Equipment and Anaesthesia Workstations
For C-Arm radiological equipment, tender specifications were tailored to favour Vision Medicaid Equipment Private Limited and manufacturer Kiran Medical Systems for its Elite model. F-Med Devices qualified despite allegedly lacking required credentials. Seven machines were supplied at Rs 1.10 crore each, although the manufacturer allegedly supplied the same model to other government departments for around Rs 25 lakh. This resulted in procurement worth Rs 7.75 crore for equipment valued at Rs 1.75 crore.
The tender for anaesthesia workstations was designed to favour Draeger's Atlan A350 model, with M Sahib and Sons Private Limited—linked to Rangila—as the sole technically qualified bidder. The contract was awarded and payments released even though the GeM portal showed the tender as under financial evaluation. Purchase orders were issued manually, violating single-bid procurement norms.
ORS and Surgical Items Overpricing
For ORS, 50 lakh sachets normally bought at Rs 2.5 each were procured via e-procurement at Rs 15 per sachet, raising the cost from Rs 1.25 crore to Rs 7.5 crore. The excess Rs 6.25 crore was allegedly siphoned by Rangila and distributed among him and DGHS or CPA officers.
Similar overpricing occurred with surgical items including dressings, sutures, cannulas, and gloves. Items worth Rs 20–25 crore were procured for over Rs 100 crore, with an alleged Rs 75–80 crore embezzled and shared between Rangila and officials.
Bypass of State-Level Procurement
The CPA is mandated to conduct state-level open e-tenders to obtain 70–80 per cent cheaper rates directly from manufacturers. Instead, the CPA avoided finalising state tenders and shifted to procuring medicines and surgical items worth around Rs 400 crore through local chemist tenders. These local tenders, meant only for emergency hospital needs, involve nearby chemists at much higher rates. This bypass has caused significant loss to the government exchequer, the FIR stated.
