Friday, 25 January 2013

Costing the tablet and the tablets

I beg to be illuminated.

The Prime Minister promised that every pledge in the electoral manifesto will be costed it out so that the electorate can gain confidence that these pledges can be carried out without breaking the bank.

And true to his word his main spokesman on IT, Claudio Grech, former Chairman of MITA and confidant of Minister Austin Gatt, has announced that provision of 50,000 tablets which will be rolled out over 4 years from Class 3 in the primary schools to Form 5 in secondary schools would involve an overall project cost of Euro 23.7 million.

Now I know this project does not include solely the provision of the tablet but also content, connectivity and training    But my calculator suggests that Euro 23.7 million spread on 50,000 units makes Euro 474 per unit.    

Labour has indicated that it will roll it out more gradually and the tablet will be given to children as they pass through Class 4 of primary schools involving 4000 tablets in the first year and the project will cost Euro 1.5 million.  

Labour's cost per unit is Euro 375.

Now presumably if one buys 50000 rather than 4000 the per unit cost would be cheaper not 26% more expensive.   May be the PN costings includes connectivity, content and training whereas the PL is costing the basic cost of the equipment.   But I doubt it as Euro 375 per unit for large quantity supply should make a generous provision for the additionals.

Is this the usual theme where the PN makes everything costs twice as much?

And how on earth are the PN going to cost the pledge that they will refund the cost of free medicine when this is not available from government through the POYC or its central supply points.    One has to bear in mind that when government provides free medicine through its systems the procurement cost is often a fraction of the retail price of such products.   Often it is 25% or less.  

So if I am entitled to a medicine the procurement cost of which for government in the normal course of events is ten Euro,  its retail price is often forty Euro.    If government has to pay free medicine that goes out of stock at its retail price it would have to pay forty Euro when normally it would pay ten Euro.

The more inefficient the procurement system gets the more expensive it would become for taxpayers to bear the cost burden for the provision of free medicine.

Who is going to cost out this inefficiency?   Would it not be better if we invest in efficient procurement systems ensuring medicines are available on time at a competitive cost rather than waste money paying for government's inefficiencies?

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