The federal government’s chaotic mask purchasing in the corona pandemic has another expensive aftermath for taxpayers. As the Ministry of Health admitted, around 230 million masks are currently stored in China, which were paid for by the federal government but cannot be used due to defects. “There are currently no plans to introduce the masks to Germany,” writes the ministry in its response to a small inquiry from the Left Group in the Bundestag, which Capital has received in advance. Instead, the ministry plans to dispose of the masks directly in China. A first order for the “recycling” of up to almost 2000 tons of material has already been put out to tender.
The department of Minister Karl Lauterbach (SPD) did not provide any information on the acquisition costs of the masks, which failed quality tests in China. A breakdown of the financial contract volume is “no longer possible”, it writes in the answer.
As early as 2021, the Federal Court of Auditors determined that the KN95/FFP2 masks that the federal government had bought in China at the beginning of the pandemic cost an average of just under 3 euros. For surgical masks, the average was 0.50 euros. The type of masks sorted out remains open in the answer. But one thing is clear: the value of the federally owned masks still stored in China adds up to a three-digit million amount. According to current information from the Ministry of Health, 370 million of around 1.9 billion masks tested have not passed the tests in China since the beginning of the pandemic.
In the spring of 2020, the federal government under the then Health Minister Jens Spahn (CDU) had contracted a total of almost six billion FFP2 and surgical masks for almost 6.5 billion euros via various purchasing channels – including at top prices from controversial suppliers, some of whom provided scrap masks. The Federal Court of Auditors later reprimanded a “massive overprocurement”.
To date, dozens of court cases are still ongoing in connection with the federal mask contracts. Among other things, numerous suppliers are complaining in Bonn from the so-called open-house purchasing process, who have not yet received any money from the Ministry of Health. In Germany there are still countless masks that were bought at high prices, which are now gradually reaching their expiration date and being disposed of.
In the case of the batches that have already been sorted out in China, the Ministry of Health is trying to get money back from the suppliers – if only for part of the 370 million masks that have already failed the tests in the country of origin. According to its own statements, the ministry has initiated arbitration proceedings against eleven suppliers. These are filed before the China International Economic Trade and Arbitration Commission (CIETAC). According to the ministry, this involves 108 million masks with an estimated total value of around 132 million euros and around 63 million dollars.
To what extent such non-public arbitration proceedings before a private arbitration board in China are promising for Western governments is at least questionable. Experts point out that even if an arbitration claim is won, it is not easy to enforce claims against a Chinese company years after the deal. The Ministry of Health commissioned the international law firm Dentons to provide legal advice in the proceedings.
For the legal disputes in China, but above all in Germany, more than 40 million euros in legal fees had already been incurred by the end of 2022. According to its answer to the small question, the Ministry of Health expects further expenses for law firms of 20 million euros for this year. As a result, the costs of procuring the protective equipment continue to rise – even if the masks have long been destroyed.
Of the masks still stored in China, 33 million would “initially” be “recycled,” the ministry wrote in its response. It does not want to reveal which suppliers the junk goods came from: trade secrets. According to a tender for the disposal of up to 1,915 tons of masks, the federally owned scrap is in warehouses in Jiaxing, not far from Shanghai.
In spring 2020, the federal government concluded direct contracts with some Chinese suppliers. He also relied on a number of intermediaries who did lucrative business during the pandemic: For example, the logistics company Fiege, which supplied masks to the health department for 1 billion euros, and also from the Spahn Ministry without a tender as a central logistics service provider was commissioned for the open house procedure, its goods in China. Shanghai was agreed as the transfer point for these masks.
According to the procurement contract with Fiege, which public procurement law experts consider suspicious due to various clauses in favor of the contractor, the family company from the Münsterland was able to assign the warranty claims against its own suppliers to the federal government. He therefore assumed all legal risks in the event of defective masks.
According to this, batches from the Fiege contract could not only be among the 370 million masks sorted out in China. Deliveries from Fiege could also be the subject of the eleven arbitration proceedings in China, in which the federal government now has to fight for repayments at its own expense. There are no legal disputes with Fiege itself, writes the ministry in its reply. The same applies to the Swiss supplier Emix Trading, who, with the help of political contacts from the CSU environment to Spahn, had concluded contracts with the Federal Ministry of Health for an initial amount of almost 1 billion euros, for an average of more than 5 euros per FFP2 mask.
The Berlin public prosecutor’s office is now interested in the Emix deals. Among other things, she is investigating the ministry’s former chief mask buyer on suspicion of bribery. This is a top official who Spahn’s successor Lauterbach left in office. In addition, the health department continues to try, even under the incumbent minister, to keep documents on the mask deals secret from the public – with some strange justifications.
“The hit-and-run mask purchase is still costing the state coffers millions,” criticized the left-wing financial politician Christian Görke. “The junk masks are becoming a bizarre rain of money for law firms.” The fact that every fifth mask in the tests in China did not meet the quality standard is a sign of failure for the federal government’s procurement management, said Görke: “The whole mask cause must be urgently and comprehensively clarified. My feeling is that not all dirty deals have been dealt with by a long shot light have come.”
This text first appeared on Capital.
