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Brazilian states in cut-throat competition over Covid-19 equipment

. Apr 17, 2020
shipment equipment covid-19 Maranhão incredible journey for medical supplies. Photo: GEM/SECOM

On the evening of April 14, a cargo plane filled with 107 ventilators and 200,000 masks from China touched down at São Luis airport, in the northeastern state of Maranhão. In order to evade blockades and having the material seized by Brazil’s federal government, the state administration originally had the equipment sent to Ethiopia, before bringing it to Maranhão.

Dubbed by the Maranhão state government as a “war operation,” the endeavor involved 30 people and BRL 6 million donated from the private sector and illustrated how hard it is for Brazilian states to procure vital equipment for their Covid-19 patients. In Maranhão’s case,

two attempts to purchase materials were intercepted by higher-bidding Germans and North Americans, while another attempt to buy domestically-made ventilators was blocked by Brazil’s federal government, which requested them for national use. </p> <p>A <a href="https://piaui.folha.uol.com.br/cidades-enfrentam-leilao-por-respirador/">report</a> by <em>Piauí </em>magazine shows how dramatic the situation is in small towns in the northeastern state of Bahia, where cash-strapped local governments must compete with one another and private hospitals for basic materials such as masks. Bahia was supposed to receive 400 ventilators of an order of 600 <a href="https://brazilian.report/latin-america/2020/04/12/china-latin-america-medical-aid-fight-coronavirus/">purchased from China</a>, but the supplier suddenly <a href="https://g1.globo.com/ba/bahia/noticia/2020/04/03/empresa-cancela-compra-de-400-respiradores-para-bahia-e-200-para-ceara.ghtml">canceled the deal</a> when the cargo landed in Miami Airport on April 3. The case almost became a diplomatic incident, with the supplier claiming it had broken the contract due to pressure from the U.S. government, while the U.S. embassy in Brazil <a href="https://noticias.uol.com.br/saude/ultimas-noticias/redacao/2020/04/04/embaixada-do-brasil-nega-que-eua-tenha-desviado-equipamentos-para-covid.htm">denied</a> any involvement of the Donald Trump administration.&nbsp;&nbsp;</p> <p>A week later, the state managed to purchase another 300 ventilators; however, while the original April 3 shipment had a price tag of BRL 42 million, the second — containing half of the volume — reportedly cost BRL 48 million, according to a <a href="https://valor.globo.com/brasil/noticia/2020/04/10/em-nova-compra-bahia-paga-mais-por-respirador-chins-e-tenta-evitar-rota-pelos-eua.ghtml">report</a> by newspaper <em>Valor Econômico</em>.&nbsp;&nbsp;</p> <p>Logistics pose another challenge. The same report mentions how hard it is for Bahia’s government to ship cargo all the way from China, which is a necessary measure to avoid the equipment being detained in the U.S.</p> <p>On April 15, Rio de Janeiro Mayor Marcelo Crivella announced the city had struck a deal with the federal government to bring in products purchased from China using official airplanes, avoiding the potential problems of transporting them on commercial carriers. They are expected to arrive in two batches: the first on April 27, and the second <a href="https://oglobo.globo.com/rio/crivella-diz-que-respiradores-chineses-para-pandemia-chegarao-no-fim-de-abril-trazidos-por-avioes-da-uniao-24371327">one month later</a>, according to newspaper <em>O Globo</em>. The cargo includes 3.2 million pieces of equipment, such as masks and ultrasound machines, as well as 300 ventilators — 70 of which have already been requested by the federal government.&nbsp;</p> <h2>Ventilators on a national scale</h2> <p>On April 13, Deputy Health Minister João Gabbardo said the federal government had agreed on a deal to purchase 4,300 ventilators from a local manufacturer, bringing the total of new pieces of equipment purchased to 10,800 in April alone. When announcing the first batch of 6,500 ventilators, the ministry informed that deliveries would happen on a weekly basis, giving the government more time to plan. All units are expected to be completed in 90 days. The administration has also sought out the help of industry service Senai to fix broken ventilators, which may add up to 4,000 pieces of equipment to the national ranks.</p> <p>Before the pandemic started, Brazil had a total of 65,411 ventilators — 46,663 of which were allocated to the public health system — according to <a href="https://www.saude.gov.br/noticias/agencia-saude/46657-ministerio-da-saude-adquire-15-mil-respiradores">Health Ministry data</a>. The ministry’s plan is to reinforce the public network with a further 14,000.

 
Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Most recently, she worked as an Editor for Trading News, the information division from the TradersClub investor community.

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