A Gupta-linked company received a R30m advance from the North West Health Department a day before it started operating its mobile clinic in the province. And, says a City Press report, questions are now being asked about the healthcare organisation Mediosa, which belongs to two Indian nationals. It was allegedly handed a three-year contract that did not go out to tender.
Two senior sources in the department are quoted in the report as saying that Mediosa was paid the advance on 30 May last year – a possible contravention of the Public Finance Management Act. The sources allege the company was asked to delay sending any further invoices until the beginning of the 2018/19 financial year, which begins in April, when money would be available to process their payments.
The report says the officials claimed the mobile clinic project, which involves using a single vehicle to service the province’s rural areas, was neither planned nor budgeted for. “The MEC was only informed by his political leaders that the project was going to happen and the head of department was ordered to do the paperwork and conclude everything,” said one senior official. “It is sad because it was never planned for and funds had to be sourced from other functions of the department to fund this mobile clinic.” Other department sources said Mediosa had been invoicing the department in the region of R10m a month.
Health MEC Magome Masike announced in his budget speech in May that Mediosa would start work on 1 June, 2017. The report says documents were obtained showing that Mediosa was paid R30m on 30 May, 2017.
The report quotes sources as saying that at least two senior department officials visited India in March, while the tender for the high-tech mobile clinic was still under discussion. In response, Mediosa co-owner Inish Merchant said the R30m was not an advance payment. Contrary to what Masike announced, Merchant said Mediosa’s contract became effective in April last year and it had already done “some groundwork” when the payment was processed. He confirmed, however, that the company had not treated any patients at the time the R30m was paid.
“We had already started doing groundwork, which included mobilising communities, creating awareness and good working conditions,” he told is quoted in the report as saying. He denied his company was invoicing the department R10m a month, but would not say how much it was. He would not divulge how much they were charging per patient treated at their mobile clinic. The services it provides include optometry and dentistry.
On how they ended up working in North West, Merchant said the province approached the Free State provincial government after seeing the work they had done there. North West subsequently showed interest and awarded them a contract. Merchant’s account, however, differs from that of provincial health spokesperson Tebogo Lekgethwane, who said Mediosa was appointed through a competitive tender bidding process. The contract began in February last year and would end in January 2020. Lekgethwane said Mediosa had, over the past eight months, received “R36m of the R50m budget set aside for the project”. This meant Mediosa had already been paid more than half of the project’s budgeted amount. Lekgethwane said Mediosa was being paid “less than R4m a month, on average”. He said the R30m “was not necessarily an advance payment”, but an “initiation fee in line with the terms of the contract”. He said the company was not paid monthly, but in tranches.
The report says the clinic is serving the most deprived areas in the Ngaka Modiri Molema and Dr Ruth Mompati districts. These include rural areas around Vryburg and Mahikeng. He said the mobile clinic had a medical team comprising a general practitioner, an optometrist, a dentist, three nurses, radiography technicians and administrative support staff. It was equipped with a laboratory.
Companies and Intellectual Property Commission (CIPC) records show Mediosa is owned by Merchant and Sundeep Kalsi. The report says according to reports on the #GuptaLeaks that were published last year, Merchant allegedly had his visa application to enter South Africa facilitated in 2015 by Tony Gupta, the youngest of the three Gupta brothers, through the family’s company Sahara Computers.
The report says the Sunday Times reported last year that the “Guptas were planning to set up a billion-dollar medical facility in Dubai with shareholders who were awarded lucrative tenders to provide provincial health departments with mobile clinics in the Free State and North West”. At the time, Mediosa had already signed a contract with the North West Health Department. Mediosa was known as Cureva when the Free State provincial government awarded it a similar three-year contract in 2015.
The publication further reported that the leaked Gupta emails show cost calculations were sent to Tony Gupta months before the Free State tender was awarded and before Cureva was established by their business associate Sunil Sachdeva. He is co-founder of Indian medical facility company Medanta.
The report says a statement issued in February last year by Indian vehicle manufacturer Tata, announcing that it built Mediosa’s mobile clinic, bears this out: “Tata Commercial Vehicles were approached by Medanta group from India for a pilot project they had bagged for a mobile clinic to be based in a rural area for a three-year period.”
Gupta-linked businessman Kuben Moodley – also a former adviser to Mineral Resources Minister Mosebenzi Zwane – resigned as a director from Mediosa in June last year, the report says. Moodley was cited in former Public Protector Thuli Madonsela’s State of Capture report, which was made public in November 2016. She said his company Albatime contributed R10m towards the Gupta’s purchase of Optimum Coal by Tegeta Exploration and Resources. Moodley had denied this.
The report says that CIPC records show that another of Mediosa’s former directors is Christian Gouws, who registers shelf companies and later sells them. He resigned from the company in March 2015, three days after it was registered as Mediosa. Gouws resigned from Lodidox, the company that bought Gupta media empire Infinity Media, after former government spokesperson Mzwanele Manyi became its active director. Manyi claims to have bought the company from the Guptas through a “vendor-financed” deal.
Merchant denied that there were any links between himself, Mediosa and the Guptas. “There is no connection at all,” he is quoted in the report as saying.
Lekgethwane said the head and deputy director-general of the provincial health department went to India to verify if the company could deliver on the contract. “In most instances, we do not investigate the origin or the citizenship of the directors. In any case it is not a requirement of a tender/bid,” he said.
North West premier Supra Mahumapelo’s spokesperson, Brian Setswambung, said there were no links between the premier and Mediosa. He said Mahumapelo had no influence on who the health department appointed. “That the company was first appointed in the Free State before North West is neither here nor there, because service providers can service more than one province, depending on their capabilities,” he said in the report.City Press report