€35m ventilator deal halted after machines didn't meet HSE standards

A confidential position paper seen by the ‘Irish Examiner’ reveals the background to the aborted €35m deal to buy ventilators from China via a media company, and the risks identified by the HSE, writes Cianan Brennan
€35m ventilator deal halted after machines didn't meet HSE standards

Regarding due diligence on Roqu’s CEO Robert Quirke (pictured), HSE procurement chief Sean Bresnan cites “lots of mentions of dealing with countries in Eastern Europe”. File photo: Julien Behal

A confidential position paper seen by the ‘Irish Examiner’ reveals the background to the aborted €35m deal to buy ventilators from China via a media company, and the risks identified by the HSE, writes Cianan Brennan.

A €35m deal to bring 1,000 medical ventilators into Ireland from China via an Irish-based media company was halted after the first tranche of €14.1m was spent, with the ventilators deemed unsuitable for use.

The HSE opted to pay in tranches for the contract for 1,000 ventilators with festival management company Roqu Media International, while attempting to source devices elsewhere in order to mitigate “significant risk” that its due diligence process had flagged up relating to the deal.

It is unclear how many ventilators had been delivered by Roqu by the end of April. The company told the Irish Examiner that just 72 devices had arrived in Ireland at that time, but an earlier communication to media gave the figure of 100.

Upon inspection, the ventilators did not meet the HSE's quality assurance standards and were never deployed in a clinical setting, according to CEO Paul Reid.

A confidential position paper regarding the proposed deal, seen by the Irish Examiner, details the background to the contract, the risks identified by the HSE’s due diligence, and the efforts made to mitigate those risks.

In response to a request for comment on the matter, Roqu reiterated a statement given to the Irish Examiner in December, declaring it had brought more than 1.5m pieces of emergency equipment into Ireland since the pandemic began, and stating “in light of media coverage, we would like to put on record that Roqu has at all times acted in good faith under the direction and supervision of the HSE”.

The HSE said, meanwhile, that it remains “in continuing discussions with Roqu with a view to resolving all issues and cannot provide any further information at this time”.

 HSE CEO Paul Reid said the ventilators were never deployed in a clinical setting as they did not meet the HSE's quality assurance standards. Photo: Sam Boal / Photocall Ireland

HSE CEO Paul Reid said the ventilators were never deployed in a clinical setting as they did not meet the HSE's quality assurance standards. Photo: Sam Boal / Photocall Ireland

The paper, authored by HSE procurement chief Sean Bresnan on March 22, states that supply of ventilators “has been identified, albeit with significant risk”. He said Roqu had approached the HSE with a view to procuring ventilators from a Chinese supplier named Shenzhen Probe, and that “given the volatility in the market place, HSE [sic] will be required to enter into a formal contract arrangement with Roqu Group by COP [close of play] Monday 23 March”, the following day.

The €14.1m transfer was actioned “on or about March 23rd” according to the HSE.

However, some of the risks identified in the position paper regarding the deal appear to have been significant.

It noted that Roqu’s deal was not with the supplier, but with another trading company, and that “this arrangement was not made clear… at the outset”, while the Chinese trader told the IDA it had informed Roqu it would not be able to supply the same machines that were verified by the HSE at Cork University Hospital as being fit for purpose. 

This was contrary to what Roqu told the HSE, the paper states, given it had “made clear” that the machines would be of the same specification.

Regarding due diligence on Roqu’s CEO Robert Quirke, Mr Bresnan cites “lots of mentions of dealing with countries in Eastern Europe”.

He acknowledges Mr Quirke has “no background in med tech … no evidence of any involvement in this sector at all”.

Contacts had described Mr Quirke to Mr Bresnan as a "good guy".

“His company doesn’t have a fantastic track record from a paperwork sense – 3 years of registrations with no accounts filed,” Mr Bresnan states.

Roqu did not directly answer a query on the subject of its accounting history.

Despite this, Mr Quirke was deemed to be ‘green’, the lowest level of risk. “There are no overt and obvious red flags that the search found but consideration need [sic] to be given to the link to a Chinese manufacturer and how and why he is involved given no track record,” the paper states.

A recommendation, included in the paper, from the two men who on March 20 tested the two Prunus Boaray ventilators brought to Ireland by Roqu, appears to be predicated on the ventilators to be procured being of the same make and model, which was not the case.

Five medical ventilators donated to Cork University Hospital by Ruijin Hospital in Shanghai facilitated by Shanghai Municipal Office of Foreign Affairs, as part of Cork City Council’s efforts during the global pandemic to help source medical equipment for the city through its strong relationship with Shanghai and other partner cities in China. Photo: Clare Keogh

Five medical ventilators donated to Cork University Hospital by Ruijin Hospital in Shanghai facilitated by Shanghai Municipal Office of Foreign Affairs, as part of Cork City Council’s efforts during the global pandemic to help source medical equipment for the city through its strong relationship with Shanghai and other partner cities in China. Photo: Clare Keogh

Mr Bresnan stated that his recommendation was that the deal for 1,000 ventilators “in the circumstances and given that the clinical need outweighs the identified risks... be concluded”.

Some measures to mitigate the HSE’s risk were suggested, as with the deal worth €35m, “there is a risk that expenditure of this magnitude will be wasted”.

Mr Bresnan suggested that Irish agencies should “secure a person with a clinical engineering/medical device regulatory background to act as HSE eyes and ears on ground”. That person would have been expected to visit “manufacturing sites to ensure products are being produced in accordance with industry standards”.

However, given the initial payment to Roqu was made in the days immediately following the paper’s drafting, it’s unclear if this recommendation was followed through.

In terms of potential issues with the quality of the machines to be received, Mr Bresnan said this issue would be mitigated by Roqu having “contractually committed to providing the … models and to a standard no less than those presented to CUH for clinical and engineering review”.

More in this section