‘No explanation’ for how R50m hospital tender ballooned to R588m – SIU

During the height of the Covid-19 pandemic in 2020, the Gauteng Health Department awarded a R50 million tender to Thenga Holdings for the refurbishment of the AngloGold Ashanti hospital.

R50m hospital tender

AngloGold Ashanti hospital refurbishments

At least 200 to 250 beds – set aside for Covid-19 patients – were expected to be included in the refurbishment, and new equipment had to be installed in the hospital’s radiology unit.

However, major delays and the ballooning of costs to over R500 million resulted in the hospital being unavailable for at least two waves of the Covid-19 pandemic.

The hospital only re-opened after 15 months, with only a handful of patients and staff.

ALSO READ: R500m ‘blown’ on AngloGold hospital, and it only has ‘six patients’

SIU reviews tender

On Tuesday, the Special Tribunal heard an application by the Special Investigating Unit (SIU) to review the R50 million tender relating to the refurbishment of the AngloGold Ashanti hospital in Gauteng.

In papers filed with the Tribunal, the SIU called the tender process “flawed, unlawful and invalid, and embarked upon without any consideration given to the Treasury Regulations and Instructions Notes”.

In addition, it appears as though the appointment of Thenga Holdings to carry out the refurbishments “was done by a panel whose legal mandate had expired”, the Special Tribunal said.

“Even more concerning was that there had been no explanation for the increase in the costs of the refurbishment from an estimated R50 million to more than ten times that estimate being R588 million as at 18 June 2020”.

Judgment has been reserved. Judge Modiba thanked all parties involved. She will be writing the judgment and will inform them when it is ready.

Pro Serve Consulting and Thenga Holdings’ assets frozen

Back in September 2021, the SIU was granted an order to freeze at least R7 million in the bank accounts of the two contractors, which resulted in Thenga Holdings and Pro Service are opposing the review application. 

At the time, SIU spokesperson Kaizer Kganyago said they had reasonable grounds to believe the funds held by Pro Serve Consulting and Thenga Holdings were the proceeds of unlawful activity.

There was also no approved budget for the refurbishments, which increased from an estimated R50 million to an amount in excess of approximately R500 million.

Pro Serve Consulting and Thenga Holdings were prohibited by the tribunal from dealing in any manner with the money held in the bank accounts, pending the final review proceedings.

Additional reporting by Thapelo Lekabe.