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Airlines including British Airways have been paid £15m to fly in Covid testing kits from China at short notice amid UK fears of being “gazumped” for the in-demand tests.
Disclosures published on New Year’s Eve show that BA earned £2.7m for air freight services, as part of a contract awarded by the Department of Health and Social Care (DHSC).
A further £12.35m went to Air Charter Service (ACS), owned by a private equity group, according to five other freshly published contract notices.
Documents attached to the contracts, awarded in late November, show that BA and ACS were paid to transport “lateral flow” kits, used to perform rapid tests for Covid-19.
“The supply of these new test kits is currently limited in the face of very high global demand and consequently it was necessary to contract for supply […] for product manufactured in China in order to secure the required quantity of product and prevent gazumping,” an annex to the contract stated.
DHSC bought the kits on an “ex works” basis, meaning the supplier was not required to take care of transporting the kits to the UK.
“Where product has to be sourced on an ex works basis it is imperative that this product is moved at the earliest opportunity to prevent it being sold to higher bidders,” the document said.
The six contracts, worth a combined £15m, were awarded without competition under special powers that can be used in an emergency such as a pandemic.
It is unclear how many flights were provided for the money or whether the companies made any profit.
Separate contract disclosures have revealed that the government witnessed “dramatic cost inflation” in the air freight market due to the widespread cancellation of passenger flights, which usually carry freight too.
“We are proud to have played our part to help during the pandemic by flying more than 12,000 tonnes of medical equipment to where it urgently needed to be,” said BA.
The airline converted two 777-200 aircraft into freighters by stripping out the seats, operating 445 return flights since the onset of the pandemic.
BA and Virgin Atlantic have won contracts worth more than £150m between them to transport medical supplies such as face masks and medical gowns from overseas.
Aviation brokerage ACS has won nearly £68m of UK government contracts.
The company is owned by Alcuin Capital Partners, which also co-owns the prestigious Groucho Club, a celebrity members club in London’s Soho.
The latest contract notices, published on 31 December, are the first to detail the role of airlines and aviation brokers in supplying testing kits to the UK.
The reference to “gazumping” also illustrates the degree of concern among officials that suppliers could rip up contracts if they receive a better offer.
The government has spent more than £1bn on lateral flow test kits since late October, according to publicly available contract information.
The Guardian has approached DHSC and ACS for comment.
Source: The Guardian
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