The Union Government has reportedly decided to offer an advance payment of over Rs 4,500 crore to the Serum Institute of India (SII) and Bharat Biotech to secure future supplies of Covid-19 vaccines.
Out of the total advance payment amount, Rs 3000 crore has been cleared for Serum Institute, while Rs 1500 crore has been cleared for Bharat Biotech.
The Finance Ministry eased general financial rules to allow this advance payment without any bank guarantees. The decision comes after the two vaccine manufacturers urged the government for financial help to ramp up their vaccine production.
•The CEO of Serum Institute of India, Adar Poonawalla had requested Rs 3000 crore from the government to boost up the production capacity for making the COVID-19 vaccines.
•The advance payment has been made at the same price as agreed earlier, Rs 150 per dose.
•The Serum Institute is expected to supply about 200 million doses of the Covishield vaccine from June.
•On the other hand, Bharat Biotech is expected to supply around 90 million doses to the government by July.
•The government has also drawn up a plan to speed up Bharat Biotech’s capacity to manufacture Covaxin from 10 million doses to about 100 million doses a month by September.
As per regular financial norms, any advance payment to a private supplier can be made only by the government on the provision of a bank guarantee.
However, this time the advance payments have been made without bank guarantees, as these are credible companies with a reputation. Also, it was an easier and faster mode to help the vaccine manufacturers to increase the production of the vaccines.
This comes as the government opened up its vaccination drive for all above 18 years of age starting from May 1, 2021. The centre has also allowed states to procure additional vaccine doses directly from the manufacturers.
India has so far administered over 126 million doses of vaccines since January 16. The nation is currently facing a deadly wave of coronavirus with over 2.5 lakh new cases being reported almost every day.