Investigations into the now controversial R836m PSA oxygen plants tender have revealed that Thabiso Mashatile, son of Deputy President Paul Mashatile, had personally signed a bid submission register on behalf of a company vying for a slice of the lucrative tender.
News24 reports that his signature appears on the register, dated July 2023, next to Modipadi Nokaneng’s bid submission – a company directed and owned by his close associates and previously exposed for allegedly benefitting from questionable Gauteng Health contracts.
The company was eventually disqualified on the basis of its construction industry grading, but not before being shortlisted as a main contender for all but two of the 58 hospitals.
Modipadi Nokaneng changed its name in November last year to 0711 Stuttgart, and is interlinked with the entire Mashatile family network – and long associated with government business.
Its director, Taletjo Mahlakoana, is, and has been, a director of multiple companies with Thabiso Mashatile and Mashatile’s stepbrother, Tinyiko Mvelase (their father is the Deputy President, but they have different mothers). The companies share the “Ngwato and Manzi Properties” name, drawn from Paul Mashatile’s late wife, Manzi Mashatile.
The owner of Modipadi Nokaneng, Lefentse Modipadi Nokaneng (30), previously co-directed Ngwato and Manzi Properties with Mvelase and Mahlakoana.
This particular tender was to form a panel of contractors from which quotations would be sourced for the roll-out of the oxygen plants. Modipadi was shortlisted for the contract, which was being handled by the Independent Development Trust (IDT) on behalf of the Department of Health, but later disqualified – though not before being ranked among the top contenders.
The tender specifications required a Construction Industry Development Board (CIDB) grading of five for mechanical engineering (5ME); however, a 5ME grading only qualifies contractors to undertake projects valued at no more than R10m.
The CIDB grading system evaluates contractors based on their financial capability and track record. It enables procurement officials to assess whether a contractor is capable of executing the work.
Modipadi Nokaneng’s grading is a problem for two reasons: original estimates placed the project cost at more than R200m, so any company bidding with a grade 5ME would have been unable to perform the work anyway, and, while Modipadi met the requirement – it indeed had a 5ME grading – it quoted R980m for 55 facilities, way above its R10m threshold.
Despite the clear grading mismatch, Modipadi Nokaneng consistently ranked first in pricing across almost every facility. The IDT’s technical assessment gave the company a total of 85 out of 100 points, including 30 out of 40 for past experience in installing PSA oxygen plants or having an agreement with an original equipment manufacturer (OEM).
The company did have an OEM agreement with a Texas-based company called K&K Consulting, which, in turn, had an agreement with a New York-based company, AirSep.
AirSep, however, confirmed to News24 that it had never heard of Modipadi Nokaneng before, and only had an agreement with K&K Consulting.
The company also relied on the American Food and Drug Administration (FDA) certificate from AirSep, rather than a South African Health Products Regulatory Authority (SAHPRA) certificate.
Internal IDT documents show Modipadi was “mistakenly” treated as compliant, even though another bidder had already been disqualified for the same reason.
By 26 September, two months later, senior IDT officials flagged the grading mismatch, and Modipadi was disqualified.
Grading jump
Curiously, the company’s central supplier database document from 2023 showed that, while it had a 5ME grading, by 2024 it jumped to a 9 – the highest possible grading for a contractor with no financial limitations on the contracts it can work on.
To achieve a grade 9, a contractor would need to complete numerous projects valued at R3m, R9m, R30m and, finally, R90m.
It’s not clear how the company managed to achieve this within the space of a year.
Added to the controversy around Modipadi Nokaneng, News24 reported last year that SARS slapped the company with a R3m tax bill for unpaid value-added tax and penalties incurred on income from government tenders.
IDT spokesperson Lerato Modisana said bid committee minutes are unclear on whether Modipadi Nokaneng’s grading was tested against the project value. She said the company was initially ranked first at most facilities based on price, but concerns were later raised that a 5ME grading only allows projects up to R10m, while the bid was R980m.
Modisana added that the IDT was unaware of Mashatile’s involvement, adding that anyone can submit a bid for a company.
In July last year it was reported that two companies linked to Mashatile’s sons were paid R36.4m for a Gauteng Government contract servicing fire alarms and sprinkler systems at public hospitals.
See more from MedicalBrief archives:
Forensic report exposes extent of state hospital oxygen tender fraud
Dodgy R836m oxygen plants deal cancelled
Companies linked to Mashatile's sons scoop R49m Gauteng hospital tender