[Asia Economy Reporter Choi Eun-young] It has been revealed that several public institutions nationwide spent tens of billions of won purchasing masks during the first half of this year, when a nationwide mask shortage occurred due to the spread of the novel coronavirus infection (COVID-19). However, some institutions explained the allegations by stating that the purchases were made to ensure mask supply.
On the 18th, according to a full survey conducted by Lee Joo-hwan, a member of the National Assembly’s Industry, Trade, Small and Medium Enterprises Committee from the People Power Party, on 52 public institutions under the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, and the Korean Intellectual Property Office, these institutions purchased approximately 5.5 million masks at a total cost of 7.48 billion won from January to August.
The total number of employees at these 52 institutions is about 96,000, which equates to enough masks for one per person per day for 57 days.
By institution, Korea Gas Corporation purchased the most with 1.42 billion won for 560,000 masks. This was followed by Kangwon Land with 1.014 billion won (290,000 masks), Korea Hydro & Nuclear Power (KHNP) with 680 million won (830,000 masks), and the Small and Medium Business Distribution Center with 680 million won (790,000 masks).
In some institutions, signs of preferential treatment in mask procurement were detected. The Small and Medium Business Distribution Center signed four out of six contracts with Company K, which had no prior transactions with public institutions and had been subject to an emergency recall last year due to defects in its mask products.
Kangwon Land signed a no-bid contract worth about 720 million won exclusively with Company L. However, Company L’s KF masks were uncertified products, and it was revealed that Company L had no history of online mask sales.
The problem lies in the fact that these repeated mask 'hoarding' activities coincided with the government’s implementation of the five-day mask distribution system during the mask shortage period.
At that time, long lines formed at pharmacies nationwide to buy masks, and complaints such as "(due to shortage) people are washing and reusing masks" surfaced online.
Assemblyman Lee criticized, "While citizens had to line up desperately to get a single mask, public institution employees were in the midst of a 'mask abundance.' It is necessary to investigate whether there were any illegal or improper practices such as preferential treatment in the mask procurement process conducted through no-bid contracts."
In response, the Small and Medium Business Distribution Center issued a press release on the same day to clarify the allegations. The Center stated that it was designated as an official mask sales outlet by the Ministry of Food and Drug Safety (MFDS) on February 26.
It further explained that to secure mask supply, it received a list of mask manufacturers from the MFDS and contacted those capable of supplying at least 50% of their daily production to official sales outlets. The Center then urgently contracted with three suppliers capable of providing the required quantities and sold masks at no profit from February 27 to March 3 for public service. It emphasized that there were no cases of mask purchases for employee provision.
The contracted suppliers were Company K (619,000 masks), Company N (150,000 masks), and Company M (30,000 masks). Company K accounted for 78% of purchases due to its ability to supply continuously at the lowest price. After the official mask sales outlet designation was lifted on March 3, the remaining stock (112,000 masks) was transferred to Nonghyup Hanaro Distribution at purchase price. The Center added that there have been no reported defects in the KF94 masks supplied by Company K and sold by the Center.
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