GP Health Department admits to debts to mostly struggling companies
JOBURG – Reports to DA reveal that the Gauteng Department of Health owes the shocking amount of R296 million to 509 companies as at the end of January this year.
The Gauteng Department of Health has owned up to the Democratic Alliance (DA) reports that ‘shockingly’, the department owed R296 million to 509, mostly struggling, small companies as at the end of January this year.
DA Gauteng Shadow Health MEC Jack Bloom said this was disclosed by Gauteng Health MEC Qedani Mahlangu in a written reply to his questions in the Gauteng Legislature. Bloom said, “This is a shocking amount of money owed to suppliers, many of which are struggling small businesses.”
He said that according to Mahlangu, only 56 percent of suppliers had been paid within the legally required 30-day period. Bloom added, “Much of the debt to companies is long-term – 245 suppliers are owed a total of R239 million for more than three months and 203 suppliers are owed R105 million for more than six months.
“Mahlangu said that the late payments were because of the following – late submission of invoices by companies, delays in submission of invoices to institutions by suppliers, suppliers who deliver over the ordered quantities and charging incorrect prices on invoices after receipt of an order with a predetermined price.”
However, Bloom rejected Mahlangu’s reasoning for late payment and said she shouldn’t be blaming companies for the late payments, alleging that the major reasons are budget problems and poor administration. He alleged that companies often have to submit multiple copies of documents because they keep getting lost.
Bloom also stated that he had a list of the 509 unpaid companies which range from fairly small amounts to huge amounts.
Some of the companies which are owed money are:
- Phillips South Africa (Pty) Ltd – R35 million
- National Health Laboratory Services – R33.5 million
- Iveco South Africa (Pty) Ltd – R18.7 million
- Kunene Health Care (Pty) Ltd – R 7.1 million
- The Nursing Services of SA – R 5.7 million
- SA National Blood Service – R 3.9 million
- Johnson & Johnson Medical (Pty) Ltd – R 3.5 million
- Respiratory Care Africa (Pty) Ltd – R 3.4 million.
He also said he knew of companies that supply vital medical equipment but don’t want to deal with the department because they fear that they won’t get paid.
Bloom said, “Premier David Makhura has acknowledged the difficulties faced by businesses because of late payments – these figures show the extent of the problem in the health department which needs urgent intervention.”
In his response, to these allegations the department spokesperson, Steve Mabona, said the department of health acknowledged debts owed to companies supplying services to their different public healthcare facilities. Mabona echoed Mahlangu’s utterances that the reasons for non-payment within the stipulated 30-day period.
“In order to avoid a re-occurrence of this, the department has since formed a Finance and Supply Chain Management Forum to address challenges and assist in payment in the stipulated time frames, as well as submission of invoices at a central point,” Mabona said.
Last month Mahlangu met with suppliers who had nothing to do with delays and apologised, pleaded for their continued support, acknowledged their cooperation and undertook to pay them accordingly. “We would like to reiterate that the department is fully aware and committed to meeting all its past and future obligations to its suppliers,” Mabona promised.
