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Durban - The R47-million rescue deal at Durban’s McCord Hospital is off with provincial health officials saying they will not budge on demands made by board members for cash to protect themselves from future public liability claims.
Health MEC Sibongiseni Dhlomo told members of the portfolio committee in Pietermaritzburg on Thursday that until the McCord board agreed to the terms and conditions of the government’s offer to take over the hospital, the deal was off.
He denied any knowledge of a R10m interim agreement for this month, saying unless the McCord board handed over the hospital within days, staff salaries and operational costs for September would be the responsibility of the board.
“The negotiations are closed. They must decide tomorrow (Friday),” he said.
Although the chairman of the McCord board, Paulus Zulu, declined to comment yesterday, he had told The Mercury that the board could not agree to the deal unless it was protected from public liability claims for the next 21 years and unless the founding principles of the century-old hospital were enshrined.
However, he said that a R10m interim management agreement had been signed with the government to allow operations to continue and salaries to be paid until the end of the month.
Zulu said the board was concerned that a future government might not honour any guarantee agreed to by the current political leadership and, therefore, wanted a cash payment which the board would put into a trust.
The provincial Health Department stepped in to rescue the hospital after American funding dried up last year and a R70m government grant was withdrawn at the end of the 2012/13 financial year.
Dhlomo said the original plan to take over the hospital at the end of March was not realised as the provincial cabinet had called for due-diligence assessments of the hospital’s affairs.
At that time an interim service management agreement was signed by the board and the department. It was set to expire at the end of this month.
“We said we would take over the hospital at the end of September. But McCord suddenly cancelled that agreement at the end of August. At the moment we don’t have anything binding us to McCord. When they asked us to pay their staff this month I said, ‘No.’”
Dhlomo said while he understood the importance of protection for the board from public liability, its demands on the issue could not be met.
“They want us to put R20m in cash in their purse. We can’t do that with government money. The cabinet will ring-fence money and give them a guarantee that if any such claims do arise they will be the responsibility of the state.
“Also, they suddenly decided that they did not want to sell us the parking lot, the nurses’ training centre and the doctors’ rooms. We are buying the hospital lock, stock and barrel. How can we buy a place that has no parking lot, no office? How do we run the place?” he said.
The portfolio committee also heard yesterday that the R28bn budget allocated to the provincial Health Department could be exceeded by R900m because of soaring infrastructure and overall institution costs.