INR 800 Cr Integrated Vaccine Complex in Tamil Nadu Remains Unused for Over 12 Yrs

In February 2021, the ministry sought partners for the project through an EOI, but no companies participated in the bidding despite initial interest.

The Integrated Vaccine Complex (IVC), developed by the public sector undertaking HLL Biotech Ltd (HBL) at Chengalpattu, Tamil Nadu, remained unoperational for over 12 years after its approval.

Despite an investment exceeding INR 800 Cr, the project, considered of national importance, has yet to fulfill its promise of enhancing vaccine security for India.

The Union Ministry of Health and Family Welfare (MoHFW) recently acknowledged the ongoing challenges in operationalizing the IVC.

Minister of State for Health, Anupriya Patel, noted that various efforts to operationalize the facility, including seeking a strategic partner, have been unsuccessful.

In February 2021, the ministry floated an Expression of Interest (EOI) to identify potential partners for the project. However, despite initial interest from several companies, none participated in the subsequent bidding process.

In March 2021, an e-tender cum auction was announced to select users for the HBL facilities on an “as is where is” basis, specifically for the production of COVID-19 vaccines. Yet, this initiative also failed to attract any bidders, leaving the facility idle.

Major Investment with No Return

As of March 2023, the MoHFW reported that the total investment in the IVC had reached INR 804.28 Cr. The facility employs approximately 87 permanent and 14 contractual workers, but despite the substantial financial outlay, the complex remains unproductive.

The IVC was initially envisioned as a cornerstone of India’s vaccine security, providing essential vaccines at affordable prices for the Government of India’s Universal Immunization Programme (UIP).

Moreover, the facility was expected to produce a wide range of vaccines, including pentavalent combination vaccines, BCG, measles, Hepatitis B, Human Rabies, Hib, and Japanese Encephalitis, with an annual production capacity of approximately 585 million doses.

State’s Interest in Taking Over the Project

The state government of Tamil Nadu has expressed a keen interest in taking over the IVC to make the project operational. On May 26, 2021, CM MK Stalin formally offered to lease the complex from the Central government.

Despite this, no decision has been made, leaving the project in limbo.

Rajya Sabha member P Wilson, who has been vocal about the need to operationalize the IVC, emphasized the urgency of making the facility functional.

He highlighted that the state had already provided the land for the project, making it logical for Tamil Nadu to take over its operations. Wilson also pointed out that the facility could play a crucial role in manufacturing vaccines for emerging diseases such as Monkeypox.

What Led to the Delays?

The IVC project, initially estimated to cost INR 594 Cr, has faced numerous delays and cost overruns. The original funding plan included INR 285 Cr in equity and INR 309 Cr in bank debt, with the project scheduled to become commercially operational by December 2017.

However, the Commercial Operation Date (COD) was repeatedly postponed, first to December 2018, and then to December 2019, due to delays in approvals, technical partnerships, and underestimation of costs related to trials, tests, and product validation.

A report by credit rating agency ICRA in May 2024 continued to rate HBL as an "issuer not cooperating" category, reflecting the ongoing challenges in the project’s completion.

The ICRA report also indicated that the project’s cost had escalated to INR 879.02 Cr, according to a revised Detailed Project Report (DPR) submitted in January 2020.

Background

HLL Biotech Ltd (HBL), a wholly-owned subsidiary of HLL Lifecare Limited, was incorporated in 2012 to manufacture and market vaccines primarily for the Government of India’s Universal Immunization Programme (UIP).

The Central government approved the IVC project in May 2012, intending for the complex to become a hub for research, manufacturing, and supply of vaccines at affordable prices.

Over time, HBL was hived off from HLL and became wholly owned by the Government of India.

At the time of its approval, the government projected that the IVC would meet about 75% of the vaccine requirements under the UIP and significantly contribute to the country’s health security by addressing the major preventable diseases.

Despite the initial optimism and substantial investment, the IVC remains non-operational, and its future is uncertain. The government's inability to find a strategic partner or a viable operational model continues to impede progress.

However, with the Tamil Nadu government showing interest in taking over the project, there remains a glimmer of hope that the IVC could eventually fulfill its intended role in securing India's vaccine needs.