No takers for govt-owned vaccine manufacturing plant in time of Covid-19

Bidding deadline extended for eighth time since January

A government-owned vaccine manufacturing plant in Chennai has found no takers even as several states have been complaining about a severe shortage of doses.

HLL Biotech, which owns the facility, was forced to extend the deadline to submit a bid for the integrated vaccine manufacturing (IVC) facility for the eighth time this week as the company didn’t get any response from private players after publishing an expression of interest way back in January.

HBL is a subsidiary of HLL Lifecare Limited, the government owned PSU which has been responsible for procuring medical equipment during the pandemic.

Executives of vaccine manufacturers said that the facility will require a capital investment of around Rs 600 crore for it to be ready for production and hence contract manufacturing for a temporary period made no sense. “For such a plant to be sustainable in the long term so they are available when needed down the road, they need to achieve cost economics. So only taking the facility for manufacturing vaccines for Covid-19 will not be sufficient but has to be complemented by manufacturing of vaccines to combat other diseases. And for that you need equity partnership not just a contract to manufacture Vaccine A or Vaccine B and then quit,” the executive said.

Sources said the government EoI was called in January realising the need to augment manufacturing capacity for Covid vaccines. An executive of HBL said the company had received communication from vaccine makers checking the status of the facility once immunisation gained momentum.

“Based on these enquiries, HLL received the direction to invite this EoI to shortlist potential party/parties for contract manufacturing/long-term lease or any other mutually acceptable arrangement, for production of Covid-19 or other vaccines. Some parties had also visited the facility to check the feasibility to commence operations in the facility,” the HLL executive said.

The executive said the facility had four manufacturing lines which can do formulation and filling. It also has a warehouse, packaging unit, animal experimentation facility. “The facility does bulk production for viral vaccines. Two vaccines can be manufactured simultaneously, he  said.

“For instance, both rabies vaccine and Japanese encephalitis vaccine can be manufactured for a period of six months each,” he said, adding that there is another facility for producing two types of bacterial vaccines.

Health ministry officials agreed that there would be an additional cost. The equipment has to recalibrated, the facility and equipment will have to be validated. All these process also need to be approved by international regulators. It will take around four months to restart even one single manufacturing line, according to them.

The private parties have raised some concerns regarding the tender conditions. Some parties had shown interest and had even done site visits. But then they backed out citing high capital expenditure. Private players are not looking to rent the facility for temporary production but for equity participation,” he said, adding that no decision had been taken to change the term of tenders. 

A consultant advising pharmaceutical majors called the project a ‘white elephant’ saying that even if the government calls for equity partnership, it may not get any response as most Indian manufacturers have started building up manufacturing capacities since last year and may not show interest in the plant.

“Nine years have passed and not a single vial of vaccine has been produced from the plant. Many workers also remain unpaid,” said K Palaniswami, vice-president of the Chengalpattu District Committee of the Centre of Indian Trade Unions (CITU), the trade union wing of the CPI(M) which counts 146 workers of the facility as its members.

The facility, which was established in 2012 on 100 acres of land at an estimated cost of Rs 594 crore by the previous UPA government as a project of national importance, was envisaged as a nodal centre for manufacturing, research and supply of vaccines at affordable prices under the government’s immunisation programme.

Sources in the health ministry said HLL failed to make the project operational due to delays in technology tie-up and validation of products, which increased cost. “In March 2020, the company submitted a revised project plan to the government of India for additional funding, but approval has not yet been received,” a ministry official said.