R330m health scandal revealed

By DIANNE HAWKER AND CANDICE BAILEY Time of article published Feb 10, 2013

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North West - R330 million worth of medical equipment gathered dust in a warehouse in Midrand for two years before it was installed.

The North West Health Department is now investigating the contract awarded to two Mafikeng-based companies that bought the equipment such as incubators, theatre tables, accessories, ultrasound units, life support systems and operating tables.

At the time of the contract, the two hospitals were yet to be built - raising questions why the tender was fast-tracked.

At least four senior managers could face disciplinary action as the department investigates the tender irregularities. The equipment was bought for Moses Kotane Hospital in Rustenburg and Vryburg District Hospital.

Raliform Investment Holdings and MR Property Developers won the tender. According to the contract, the companies would have to supply all medical equipment to the hospitals. The department started probing the matter more than a year ago and asked forensic auditors to investigate.

It is not the first time the provincial Health Department has come under fire for irregularly awarding questionable tenders. The department has been entangled in a 14-month legal battle with property developer Peolwane Properties after it signed a R650m lease for a head office building, but refused to occupy the controversial complex.

The department is also probing the supply of coal to hospitals in one of its regions, where it allegedly paid millions extra for sub-standard coal. The coal was allegedly ordered irregularly as a result of supposed collusion between suppliers and hospital staff.

The latest North West health scandal comes on the back of health authorities in Limpopo wasting medication estimated at R14m - mostly antiretroviral drugs for HIV patients that had been left to expire in a depot. The stock was part of the multimillion-rand pharmaceutical contracts awarded irregularly in 2011. In Gauteng, the health department was criticised for owing its suppliers R1.4 billion. At Chris Hani Baragwanath, equipment worth R5m could not be repaired due to unpaid bills.

In North West MR Property Developers was awarded a tender of R134m to provide medical equipment to Vryburg District Hospital, while Raliform Investment Holdings was awarded a R195m tender for equipment at Moses Kotane Hospital in Rustenburg. Sources close to the investigation said the probe centred on how the tender was “legally flawed” from the time it was awarded until the equipment was delivered.

The tender was awarded in February 2008 and processes were allegedly flouted to speed it up – despite the hospitals only being scheduled to open five months later.

Moses Kotane Hospital opened in 2010 and Vryburg hospital in 2011.

The Sunday Independent understands that auditing firm SizweNtsalubaGobodo has made preliminary findings, pointing to irregularities in the tender. They include:

- The tender was advertised during the December holidays.

- The briefing session that followed the advert happened four days before Christmas.

- The tender was not advertised on the government’s tender website, contrary to treasury regulations.

A source said other prospective bidders objected to the tender process, but their request for an extension to the closing date was ignored. The SizweNtsalubaGobodo probe also looked at the work of the bid adjudication and evaluation committees, the source said.

The adjudication committee met before the bid evaluation committee, which shortlists bidders.

SizweNtsalubaGobodo’s initial findings are that the companies were awarded more than what the initial tender documents allowed - pushing up their allocation by between R29 million and R36m.

So far the investigation has found that in at least three instances, invoices were received before the order forms; the wrong company details appear on the invoice; and officials signed for goods that had not been delivered.

SizweNtsalubaGobodo director Mike Terheyden did not respond to calls and texts.

Provincial health spokesman Tebogo Lekgethwane said the investigation was an internal matter.

“The tenders are the subject of an investigation which may result in some officials being charged (with) misconduct. We are not at liberty to respond conclusively to individual questions at this stage.”

Raliform director George Leshaba said all issues relating to the tender were sub judice. Leshaba said he was unaware of the Gobodo investigation and findings.

MR Property Developers director Roulgh Mabe said; “There has been an investigation forever ... They asked us to co-operate with Gobodo but they did not come back to us to tell us what happened. This is an old story.”

Mabe said the equipment was stored in a Midrand warehouse for several months, but blamed the department because the hospitals were not completed on time. - Sunday Independent

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