Husband of presidency spokesperson's R125m PPE tender bonanza
Johannesburg - The husband of President Cyril Ramaphosa’s spokesperson Khusela Diko is among the beneficiaries of the government’s multibillion-rand Covid-19 personal protective equipment (PPE) contracts.
The Sunday Independent can reveal that Madzikane II Thandisizwe Diko’s company, Royal Bhaca Projects (RB), was awarded contracts worth R125 million by the Gauteng Department of Health on March 30 - days after the president announced a national lockdown.
According to sources and official documents - including internal memos, quotations, purchase order commitment letters and the Gauteng Covid-19 expenditure report - Royal Bhaca scored two contracts worth R47m and R78m, respectively, for the supply and delivery of PPEs to the department.
Diko, the sole director of Royal Bhaca, married Khusela, who is also a member of the Gauteng ANC provincial executive committee (PEC), at a lavish traditional ceremony held at KwaBhaca in Mount Frere in December, 2018.
Royal Bhaca’s contracts were part of R2.2 billion PPE tenders awarded to 75 companies by the Gauteng Health Department since March 30, 2020.
Other major beneficiaries included Maponya Medical Solutions Pty (Ltd), which was awarded contracts valued at more than R265m, Nkane Projects, which got a R257m tender, LMD Engineering, which benefited to the tune of R165m, as well as LNG Scientific, which walked off with a R113m contract.
POE-IT was awarded a R64m tender, Olee Telecom Solutions (Pty) Ltd R25m, Umnothozwide R25m and Mokone Trading and Projects Pty (Ltd) R17m, among others.
Insiders told the Sunday Independent the department also paid inflated prices, above the National Treasury’s regulated PPE price list published on April 15.
This came as the Special Investigating Unit this week moved a step closer to obtaining an overall presidential proclamation to probe allegations of corruption and procurement irregularities involving the R500bn Covid-19 relief funds countrywide.
Royal Bhaca scored the contracts on March 30 and April 1, respectively.
In a telephonic interview on Friday, Diko confirmed that he was awarded PPE contracts by the Gauteng Health Department but claimed he was never paid despite rendering the service. He refused to reveal the value of his contracts.
“What is this about? Maybe it’s important that you are doing it because some of us never got a cent from this, you know. But I am gonna give you a formal response, I am just shocked from reading what you have out here,” Diko said.
“I mean, I walked away from this deal. RB, Royal Bhaca, was never paid anything from the department in spite of having delivered. The contract was cancelled.”
When asked why the contract had been cancelled, he responded: “Maybe they can provide reasons for that. But it was just cancelled. It’s amazing that there can be an assertion that there is R139 million that RB has with the department currently. It just doesn’t make sense.”
In a written response yesterday, Diko said: “Royal Bhaca Projects does not have a contract with the Department of Health. The company has also not been paid anything by the Department of Health.
“The company had submitted a quotation to the Department in response to a public call the Department had made for emergency procurement of personal protective equipment.
“A commitment letter of R78 million not R139 million was received. The Department cancelled the commitment letter at my request after realising that there could be a perception of a potential conflict of interest as you now allege.”
However, the department’s Covd-19 expenditure report shows that Royal Bhaca was awarded another R47m PPE contract on March 30, two days before it got the one for R78m on April 1.
The R47m contract, for the supply of 1 million biohazard health care waste and biohazard health disposable bags, each, was signed by Thandi Pino, the Gauteng Health Department’s chief director for supply chain and asset management on March 30.
“This letter serves to confirm that your quotation for the services listed below has been accepted subject to the terms contained therein,” read part of the commitment letter.
Approached for comment on allegations of a conflict of interest and that her husband was awarded the contracts due to her political influence in Gauteng, Khusela said: “I believe that my husband has already responded to you on this matter.
“He did engage me after he had received the commitment letter to supply PPEs to the Gauteng Department of Health and I expressed my reservations on him doing business with the provincial government. My understanding is the commitment letter was subsequently cancelled and no money was paid to him,” said Khusela.
The expenditure report also shows that Royal Bhaca and other beneficiaries charged the department up to seven times the cost of goods and services, way above the National Department of Health’s regulated prices.
For example, Royal Bacha charged the Gauteng Department of Health R58 per surgical mask, which has a regulated price of R12.48. It charged R85 per 500ml unit of Actigerm alcohol sanitiser, which is regulated at R46.37, and R7 per medical waste bag, which has a regulated fee of R1.80.
Diko was awarded contracts to supply 1 million medical waste plastic bags, and 500 000 each of dust masks, sanitisers and surgical masks.
An insider said the department spent R2.5 billion in three months on PPE suppliers, the majority of which had been in existence for less than a year and had no record of “value-add”.
“The duplication of and the disregard of the pricing regulations in the procurement process indicates that the corruption is rife and blatant; it is without regard for the lives and well-being of the people of this country during this crisis. They are taking advantage of the crisis to fatten their pockets and line their stomachs,” said the source.
Gauteng Health Department spokesperson Kwara Kekana did not respond to questions sent about PPE contracts awarded to Royal Bhaca and other beneficiaries, the value of the tenders, the procurement process followed and allegations of irregularities and inflated payments.
On Friday, SIU spokesperson Kaizer Kganyago confirmed that the Gauteng Department of Health was among government departments and entities under investigation for alleged Covid-19 relief funds procurement irregularities.
“We are investigating the issue of the purchasing of PPEs in the Gauteng Department of Health and, obviously, for the protection of the people that have put the allegations to us we are unable to indicate who are the people who have been complaining about it. In other instances, you find that the issue comes up, like the issue of the Gauteng IT tender, it was the Office of the Premier that asked us to come,” said Kganyago.
He said after being asked by the Department of Justice to close all possible legal loopholes to ensure the proclamation was not challengeable in court, the SIU did just that this week.
“In the statement the JPS cluster issued on Wednesday, they indicated that they are finalising those issues and tightening the whole thing, and it would go to the president later this week, and we are hoping that the president will sign it. It doesn’t mean we are not going on the allegations, but we are at this stage dealing with them on a piecemeal basis while we are waiting for that proclamation to be finalised,” he added.
However, Kganyago emphasised that they were not investigating the Solidarity Fund “yet”, because no allegations had been made against it.
“What we are looking at is the relief funds that were put out by the government to assist with Covid-19 and making sure those monies are used for the purposes they were intended for.”
Gauteng secretary of the National Education, Health and Allied Workers Union Tshepo Mokheranyana, whose union earlier took the government to court in a bid to force them to provide PPEs, said these had since been supplied.
“For the past three months, there is no member or branch of the union that has complained about PPEs, which means PPEs are there.”
Mokheranyana declined to comment on the Royal Bhaca tender, saying he did not have information on it.
According to the website of the KwaBhaca Great Kingdom, Diko is the reigning king of the Amabhaca tribe in the former Transkei homeland of Mount Frere, Umzimkhulu and surrounding areas in the Eastern Cape.
The Sunday Independent