Brazil cancels Covaxin contract after ‘serious accusations’ of irregularities

Brazil will suspend a $324m Indian Covid-19 vaccine contract that has mired President Jair Bolsonaro in accusations of irregularities, health minister Marcelo Queiroga announced on Tuesday.

The deal to buy 20m doses of Bharat Biotech’s Covaxin shot has become a headache for Bolsonaro after whistleblowers went public with alleged irregularities.

A former employee at the health ministry recently told the prosecutor’s office that he told the president that he was pressured to sign a contract that would increase the average price of doses by 1,000%.

Bolsonaro, whose popularity has faded as Brazil’s Covid-19 death toll climbed past 500,000, has denied any wrongdoing, saying on Monday he was not aware of any irregularities. But thorny questions refuse to go away, and may pose problems for him ahead of next year’s presidential vote.

Queiroga said at a news conference his team would probe the allegations during the suspension.

“According to the preliminary analysis of the CGU, there are no irregularities in the contract but, for compliance, the health ministry chose to suspend the contract,” the ministry said in a statement.

Brazilian federal prosecutors have opened an investigation into the deal, citing comparatively high prices, quick talks and pending regulatory approvals as red flags. It is also being probed by a Senate panel investigating the government’s handling of the pandemic.

At a hearing on Friday, Luis Ricardo Miranda, head of imports at the health ministry, told senators he refused to approve an import licence because an invoice for a first shipment asked for upfront payment and was sent by a company not mentioned in the contract.

Government officials have denied any irregularity in the contract and said that the whistleblower’s claims would be investigated.

One of the leading opposition senators on that panel filed a formal criminal complaint against Bolsonaro at the supreme court on Monday. Senator Randolfe Rodrigues said he wanted the court to investigate “the serious allegations” and to find out why Bolsonaro “did not take any action after being notified of the existence of a giant corruption scheme in the health ministry.”

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