Health Department wastes millions

DA health spokesman Jack Bloom says nobody has been fired or disciplined over mess. Photo: Antoine de Ras

DA health spokesman Jack Bloom says nobody has been fired or disciplined over mess. Photo: Antoine de Ras

Published Nov 29, 2011


The Gauteng Department of Health and Social Development appointed contractors who neither had the qualifications nor the competence to build hospitals in the province, leading to millions in losses.

This is contained in a damning report by Auditor-General (A-G) Terence Nombembe that is before the Gauteng Legislature.

The A-G now wants Gauteng head of department Dr Nomonde Xundu to act swiftly against the people responsible to avoid future acts of maladministration and tender-rigging.

DA Gauteng caucus leader Jack Bloom said the report showed “the disastrous incompetence in the Gauteng Health Department” that had seen hospitals “deteriorate alarmingly”.

“The distressing thing is that nobody has been held accountable for this appalling mess. Nobody has been fired or disciplined, so the mismanagement is likely to continue.

“Expert project managers need to be brought in to ensure that money is spent effectively in fixing hospital infrastructure,” Bloom said.

However, the department disagreed with Bloom.

Provincial health spokesman Simon Zwane said a lot of effort had been made to improve things. An unqualified audit report did not mean the department was in a disastrous state.

In his report, the A-G found that Ilima Construction was awarded multiple contracts in Gauteng, North West and the Eastern Cape – all amounting to R1 billion.

“Two contracts to the value of approximately R356.7 million were awarded to Ilima for projects in Gauteng, individually or as part of a joint venture that was terminated. The contract for the construction of Zola Hospital was awarded to this contractor at a contract value of R480 million, an increase of 43.35 percent, compared to the original contract value of R334.8 million, without following a procurement process,” Nombembe reported.

All the contracts were later terminated.

The A-G also found that Ilima did not meet the construction grade to build such a hospital. Nombembe said Ilima’s grading allowed it to work only on projects valued between R30m and R100m.

The A-G also found that officials involved in supply chain management had contravened the procurement legislation, regulations and practices.

Zola Hospital, which was supposed to have been opened in November 2007, is now expected to be opened next month.

The report found that 53 percent of the 15 health projects had contravened rules and regulations.

The A-G also found that the Health Department had awarded three contracts worth R837m to a company that had failed to submit an original tax clearance certificate from Sars.

None of the projects were completed and replacement contractors had to be appointed because of poor performance.

Nombembe also found that R23.2m was awarded for the construction of the new community health centre in Eersterus, near Pretoria, even though the contractor was not registered with the Construction Industry Development Board (CIDB) at the date of its appointment.

The contract was later terminated due to poor performance, and a replacement contractor was appointed to complete the project.

The A-G also found that a contract for a project to build two single-storey security observation wards at Sterkfontein Hospital, valued at R21.9m, was terminated due to insufficient progress, and a replacement contractor was subsequently appointed at a cost of R12m.

“The implementing agent estimated the financial implication of cancelling the previous contract and appointing a new contractor to complete the work at R3.9 million,” the A-G said.

Nombembe found the department had failed to do background checks on companies doing business with it.

“The department cancelled five contracts awarded to two contractors,” the A-G said, estimating the cancellation of four projects worth R403m had resulted in the department paying more than R211m.

The A-G also found that multiple contracts amounting to R88.7m for projects at the Sebokeng, Eersterus and the Charlotte Maxeke Johannesburg Academic hospitals were awarded to a contractor not registered at the CIDB when two of these contracts were awarded.

The upgrading of Charlotte Maxeke was for the Folateng wards and the ICU, dialysis and gastroenterology units.

The contractor was registered with a lower grading to that required for the third contract. The lower grading allowed the contractor to be awarded tenders of up to R10m.

These contracts were later terminated due to insufficient progress.

The A-G also found that there was poor project management for most of the projects.

At Charlotte Maxeke, the contract was cancelled 22 months after the date on which the project should have been completed.

Ilima director Thembelikayise Lupepe was not available for comment on Monday. - The Star

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