Coronavirus: China raises prices for PPE ten-fold as countries scramble
Prices and freight costs for protective gear has skyrocketed as NSW looks to secure 200 million face masks for the next year amid the COVID-19 pandemic. Now, a crack squad has been formed to bypass greedy Chinese companies holding us to ransom.
NSW
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Chinese prices for crucial health protective equipment have increased up to 10 times and freight has quadrupled in cost as NSW rushes to secure 200 million face masks for the next year.
A private sector crack squad has gone to extraordinary lengths to contest the international arms race for personal protective equipment, tapping into the state’s deep international business networks forged over decades of education, trade and services links.
It can be revealed that NSW made a conscious decision to be as self sufficient as possible sourcing PPE, rather than relying exclusively on Canberra’s procurement chains.
The challenge to secure supplies is now an international showdown, with counties deliberately outbidding each other as the prices for stockpiles of masks, goggles, gowns skyrocket.
Federal Chief Medical Officer Professor Brendan Murphy told a senate inquiry into the government’s COVID-19 response that Australia has been forced to pay “premium prices.”
“Obviously there have been lots of people offering PPE,” Prof Murphy said.
“There have been some people who have been making fairly outrageous price demands … we certainly have been paying premium prices, but the … message from government all the way through has been do what you need to make us safe.”
NSW authorities are confident our procurement team has the edge.
Overseen by Police Commissioner Mick Fuller, the international procurement squad is working relentlessly around the clock to forge international deals while at the same time local manufacturing chains have been bolstered.
For the first time, The Daily Telegraph can reveal how Sydney has mobilised an intricate and personal network of international business contacts to carve out unique supply chains for NSW.
Organised chiefly by Rod McGeoch – the mastermind behind our 2000 Olympic bid – the list of business contacts NSW has used to link up to international procurement chains is a roll call of the state’s best corporate connections.
Mr McGeoch himself was, by chance, due to commence work this year with Chinese company 99 Technology whose Australian parent company Investorlink has been doing business in Asia for more than 15 years.
He used this as a jumping off point for the state’s procurement links, but around him other offers were coming forward, Mr McGeoch said.
Neurosurgeon Charlie Teo connected him with a Sydney-based Chinese contact to assist, and former UBS banker Matthew Grounds harnessed connections through management consulting firm McKinsey and Atlassian founder Scott Farquhar.
Wesfarmers – which owns Bunnings – has also assisted, Mr McGeoch said.
Surprising links helped too – Mr McGeoch’s own brother James was a businessman in China for almost two decades – having overseen the landscaping of Shanghai Disneyland – and has helped with procurement connections.
The private sector links have worked closely with government authorities out of the Olympic Park COVID headquarters, vetting samples to ensure equipment is suitable.
Mr McGeoch said private sector squad was tapping not just into China but also Japan, Malaysia and even Belgium to secure the equipment the state needs, and this was in addition to NSW health pursuing its regular channels.
Asked about the price hikes from China, Mr McGeoch said “There have been shifts in the prices as demand has become so intense but nonetheless we have audit controls.”
“Having beaten China for the Olympics by one vote I always wondered if they’d one day make me pay for it – maybe that’s why the prices are going up,” he added jokingly.
Some dealers in China offer equipment on the grounds on “accept now or the price will change in 24 hours”.
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One senior government Minister said the Chinese approach was bordering on “extortion”, but said he was confident our team was finding the best deals available.
There are up to four Treasury officials sitting with the PPE taskforce at any given time, checking and double checking deals.
In addition, NSW has strategically placed contacts visiting the factories and dispatch locations internationally.
Police have also been tasked with ensuring product is dispatched from planes when they arrive in Australia rather than being delayed.
Health Minister Brad Hazzard praised the extraordinary effort to source the equipment, which he said was a cross agency and private sector collaboration like he had never seen before.
“I’m blown away by the work that not only health but police, treasury, customer service, investment and the private sector are doing to get to the front line all of the PPE that the rest of the world is scrambling on.
“We’ve learnt we can only rely on us and there is a total commitment to making sure our frontline health and other staff can get the PPE they need.”