Public works to investigate entity over R800m oxygen plant tender

The Department of Public Works and Infrastructure (DPWI) is asserting its power to get to the bottom of an inflated tender.

Earlier this year, three companies secured a R836 million deal to supply air purification systems to the Department of Health.  

The DoH has since cancelled the contract, but the DPWI stepped in to challenge the entity that both managed the tender and had committed to investigating the irregularities.  

IDT cannot investigate themselves

The Independent Development Trust (IDT) oversaw the tender to supply the DoH with pressure swing absorption (PSA) oxygen plants to be installed in hospitals.

Of the three companies involved in the procurement, one allegedly submitted fraudulent documentation and the other two are allegedly not registered with the South African Health Products Regulatory Authority (SAHPRA).

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As per Minister Dean Macpherson’s letter to the IDT on 19 November, the contract had an initial budget of R256 million but rose by almost R600 million.

Additionally, Macpherson’s notice stated that one of the unregistered companies has 23 different addresses that were periodically changed.

The department became aware of the issue in late October and has since been unable to get full disclosure on the matter.

The IDT stated that it would investigate, but DPWI has insisted that the entity members “cannot investigate themselves”.

Only partial info supplied

The DPWI had sought on several occasions throughout November to view the details of the contracts signed between the relevant parties.

The IDT responded to Macpherson’s requests for information by only supplying the department with partial information and not the full bid documents.  

Macpherson last week informed IDT that the DoH would be withdrawing the contract due to alleged corruption.

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Not satisfied with the IDT’s lack of transparency, the minister has initiated an investigation to seek clarity on “corporate governance challenges”.

“My interactions with the IDT over the past two months have raised serious concerns about governance within the organisation,” stated Macpherson

“It is patently clear that an organisation cannot and should not be allowed to investigate itself,” he asserted.

Gratitude of DoH assistance

Minister Macpherson expressed his gratitude for the collaboration and support he had received from former Minister of Health, Dr Aaron Motsoaledi.

Macpherson stated he had notified President Cyril Ramaphosa asking for a Special Investigating Unit probe, but said he would also appoint an independent firm to investigate the alleged corruption.

“We simply cannot allow close to a billion rand in public funds to be potentially lost through alleged corrupt activities, particularly when it involves essential healthcare equipment intended to save lives,” Macpherson concluded.

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