KATHMANDU: The Department of Health cancelled an agreement on purchasing medial equipment from China, with a private company, on Wednesday.

Director General of the department Mahendra Prasad Shrestha on Wednesday said the deal with Omni Business Corporate International has been scrapped on the failure of the company to deliver a fixed amount of materials on time.

The Health Ministry will now call another tender and procure necessary items required to battle the coronavirus pandemic, according to Shrestha.

OBCI had struck a deal with with the government on March to procure various materials, along with testing kits, and deliver them by April 2.

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Around ten per cent of the consignment were received by the government on 29. However, it became evident that the suppliers couldn't deliver the final lot on the agreed date, an extended deadline, following which the tender was cancelled, Shrestha said.

"There was no communication by the suppliers with the concerned authorities regarding delivery of equipment and we grew increasingly certain that they couldn't fulfil the requirement on time."

OBCI's security deposit worth NRs 50mn has been seized with it's failure to honour the deal on time.