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CAG diagnosis: Chemist shop at GMSH-16 given undue benefit, hospital says favoured no one

In the latest instance, the lease was extended from February 2014 to February 2019 at a monthly rent of Rs 1,70,156.

Written by TANBIR DHALIWAL | Chandigarh | Published: January 2, 2015 10:33:41 am

A private chemist shop at the Government Multi-Speciality Hospital in Sector 16, which offers only 10 per cent discount on branded medicines in contrast to as much as 35 per cent offered by chemists in other city-based hospitals, has been repeatedly given extensions by the authorities.

An audit conducted by the Comptroller and Auditor General of the accounts of Director of Health Services last year had held that the GMSH authorities had given undue benefit to the shop owner, leading to loss of potential revenue of Rs 53.94 lakh.

“Leasing of prime government property to a private party at a rent which was significantly lower than the prevailing market rent for similarly situated properties, and that too without any condition in the lease deed for offering discount to patients, neither served the government exchequer nor benefitted the patients, and only served the interest of a private party,” the report stated.

In 1992, the UT Health Department, after an auction, leased out the chemist shop to one Sunil Kumar for two years at a monthly rent of Rs 25,000. Later, he was given repeated extensions despite objections raised by the then Finance Secretary-cum-Secretary of Health.

These extensions were given in 1995, 1997, 1999, and 2000, by arbitrarily fixing the lease amount, instead of auctioning the shop as is the practice in other hospitals.

In 2000, the department accepted the lessee’s request for extension of lease on the basis of a decision taken by the Chandigarh Administration regarding settlement of rent of shops of the Bridge Market in Sector 17, which is not relevant to shops located in hospitals.

“Despite non-execution of a lease deed on consecutive three extensions by the lessee, he was again given undue favour by extending the lease for five years with effect from February 18, 2004 @ Rs 90,000 per month,” the audit observed.

In the latest instance, the lease was extended from February 2014 to February 2019 at a monthly rent of Rs 1,70,156.

The audit report noted that there is a system of auctioning of chemist shops at the Government Medical College and Hospital in Sector 32 and the PGI.

At GMCH-32, a shop was leased out at a monthly rent of Rs 16 lakh in 2012 and another at Rs 19.12 lakh in 2013. These shops offer discounts ranging from 15 to 35 per cent.

At PGI, the monthly rent of chemist shops varies from Rs 11 lakh to Rs 44 lakh depending on location and they offer discounts from 15 per cent to 35 per cent. Last year, PGI leased out a chemist shop at a concessional rent of Rs 20,000 per month to a party which offered the maximum discount of 57 per cent.

“Had the department followed this pattern of leasing out the chemist shop at a concessional rent, the same would have benefited poor patients,” said the audit report.

Director of Health Services Dr V K Gagneja refused to comment on why the chemist shop lessee was repeatedly favoured. An official from the hospital administration, however, said, “No undue favour was given to any party. The shop is covered under the policy of the Chandigarh Administration vide letter dated November 5, 1997 regarding settlement of rent of shops of Bridge Market, Sector 17.”

This is an explanation which the audit report rejected.

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