IMANI Alert: Novelty is NOT Innovation – the Story of Fly Zipline Ghana

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IMANI has spent the last few days reviewing a large amount of published research about medical supply chain logistics, national blood management, national cold chain systems for biomed distribution, and emergency care in Ghana. It has also reviewed Zipline’s track record in other countries and the contractual and due diligence information related to its specific, upcoming, initiative in Ghana. The Ghana Health Service – Fly Zipline Ghana drone health supplies delivery programme is novel, but the current strategy will end up improving nothing about our health system if care is not taken.

-Using the van delivery mechanism we describe in this alert, the full cost per 2kg of blood (~4 pints) delivered to a patient from a facility within an 80km radius comes to $0.75. The “drone premium” is thus nearly $18 per blood bag.  A cost higher than the retail price of one pint of blood in those Ghanaian facilities where blood is sold.

-The cost of collection, screening and storage of blood in the current Ghanaian health system is currently estimated at $12 a bag. The effect of the drone premium would be to increase this to ~$32 on average, a nearly 270% increase. Contrast this with a road-based hub-and-spoke model that would add a maximum of $2 with minimal loss of speed in delivery.

-That Rwandans are using Zipline in a targeted fashion is easily discernible from the fact that the average delivery rate per day for the drones, since Zipline started operating in the country, is six. In Ghana, in our usual leaping before looking, we are projecting 600 deliveries a day!

-Rwanda has augmented the district level fleet for medical distribution alone with more than 30 trucks. We have struggled to hit even 15 trucks for the national to regional distribution fleet. Clearly, whatever it is we think we are doing, copying Rwanda isn’t it.

Such a massive transport premium has major public finance implications and should thus inform our recommendations at the end of this article.

Legal Shocker

Imagine our shock when we realised that the Zipline contract that is being urged on Parliament by the Health Committee has actually expired on its own terms and needs to be urgently redrafted to reduce Ghana’s risks.

Clause 4.13 makes it absolutely clear that should the government fail in obtaining parliamentary approvals for Zipline by 31st October 2018, the contract shall lapse automatically at Zipline’s solediscretion and must then be resuscitated through another agreement.

It appears that the use of “or” in the clause is confusing the government. That disjunction means simply that EITHER a failure to obtain parliamentary approval OR failure to secure regulatory approvals within six months after parliamentary approval qualifies as a termination trigger exercisable at Zipline’s discretion. It is not a “conjunction”. Both conditions are equally fatal, and right now we are more than one month past the first timeline.

Zipline does have the right even after the Parliamentary approval to terminate the agreement without further cause as the Government is technically in breach already. The sensible thing to do would be to replace the contract with another one to remove thisunilateral discretion.

It is ridiculous that it was agreed upon in the first place, but it is mind-boggling that the Health Committee still wants to pass a contract that has an active clause allowing unilateral abrogation without cause.

Source: imaniafrica.org

6th December 2018

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