By Our Correspondent
KARACHI: A Rs640 million health insurance contract awarded for 11,600 employees of the Karachi Metropolitan Corporation (KMC) has come under scrutiny amid questions over transparency, procurement procedures and selection criteria.
According to details, the agreement was awarded without public advertisement or open competitive bidding, raising concerns among stakeholders about the process through which the contract was finalised. Sources claimed the deal was directly awarded to TPL, described by officials as a relatively lesser-known player in the insurance sector.
The agreement, reportedly signed for one year, is intended to provide medical insurance coverage to KMC employees. However, sources alleged that the process was conducted in a confidential manner and completed in haste, with insurance cards issued before completion of all procedural requirements.
Concerns have also been raised over the exclusion of retired employees, with around 27,000 former KMC workers reportedly not included in the scheme.
Under the arrangement, employees are said to contribute around Rs20,000 annually, resulting in deductions of more than Rs230 million from salaries. The insurance package reportedly offers coverage ranging from Rs150,000 to Rs500,000 depending on employee grades.
Sources further alleged possible conflict-of-interest concerns and claimed that individuals linked to the KMC leadership may be associated with entities involved in the arrangement. These claims have not been independently verified.
Allegations have also surfaced that businesses linked to individuals close to the mayor have expanded their presence in different KMC departments, including advertising and local taxation, raising concerns over governance and commercial influence in public systems.
The process reportedly involved issuance of around 11,600 medical insurance cards, although the total number of KMC employees is stated to be approximately 16,946. Officials confirmed that some cards were issued in the names of retired and deceased employees, raising questions about the accuracy of official records.
The insurance plan was approved following a council resolution passed on April 10, 2026. Subsequent directives from KMC’s Human Resources and Medical Services departments required submission of detailed employee data, including personal and service information.
According to the policy structure, employees are divided into three categories: Grade 1 to 12 employees are covered up to Rs150,000, Grade 13 to 17 up to Rs300,000, and Grade 18 and above up to Rs500,000.
However, the agreement reportedly includes a clause stating that if annual medical expenses exceed allocated funds, the company would be responsible for only 50 per cent of the additional cost, a provision that has raised further concerns.
Questions have also emerged regarding the acceptance of the policy at major hospitals, with critics arguing that the selected insurer is not among the country’s largest established providers, potentially affecting access to healthcare services.
Sources compared the arrangement with similar processes at other public utilities, where competitive bidding was conducted and established insurance companies participated. They claimed that while larger insurers ranked higher in evaluations, the final contract was awarded to TPL.
Further concerns were raised over the payment structure, with sources alleging that the full premium was paid upfront instead of negotiated staggered arrangements, adding to financial scrutiny.
The development has been described by some stakeholders as a potential major governance issue within KMC, with calls for an independent inquiry into the selection process, financial structure and implementation of the scheme.
A representative of medical staff, speaking on condition of anonymity, said workers deserved equal and dignified healthcare coverage, adding that lower-grade employees appeared to have received comparatively limited protection under the current arrangement.
Employees have demanded a transparent investigation into the procurement process and the overall execution of the health insurance programme.
