In a scenario reminiscent of the dodgy Digital Vibes scandal, unknown, obscure, apparently unaccredited private contractors have been appointed to install oxygen plants at 55 state hospitals, in a R836m tender.
Bulkeng (Pty) Ltd, one of the contractors appointed by the Independent Development Trust – acting as project manager for the Department of Health – is one of those entities that regularly submits bids for all manner of government tenders, from roadworks and laundry equipment to mops and buckets.
The company has its fingers in other pies too, reports Daily Maverick, having applied last year for prospecting rights to mine iron ore, manganese and limestone in the Northern Cape.
Now, after a tender process fraught with alleged irregularities, this little-known company has clinched a R428m deal to install highly technical pressure swing adsorption (PSA) oxygen plants at government hospitals across South Africa. (As a chemical process, adsorption differs from absorption).
The deal was signed off by Dr Sandile Buthelezi, the Health Department’s beleaguered director-general. Buthelezi is currently in hot water after News24 earlier this year detailed an alleged kickback paid to him. The alleged payment of R500 000 was reportedly made in connection with another project the IDT had managed on behalf of the Department of Health (DoH).
The DoH’s budget for the oxygen plants roll-out, meanwhile, stands at R836m. This is made up of Bulkeng’s bill, plus R152m due to be paid to another controversial contractor and its joint venture partner (more below).
Additional professional fees, management fees and maintenance costs are also included in the budget, said the DoH.
The project is being bankrolled by The Global Fund, an international organisation that pools resources for health projects in various countries.
No accreditation
The foremost concern regarding Bulkeng’s appointment relates to the company’s accreditation as a supplier of medical products, or lack thereof. The bid documents stipulated that the contractors needed to be registered with the South African Health Products Regulatory Authority (Saphra).
Initially, the IDT assured us that Bulkeng had submitted a valid Sahpra certificate, however, Sahpra, said Bulkeng was not listed on its database.
We continued pushing the DoH and the IDT for answers, leading to a somewhat bizarre turn of events. The DoH claimed that Bulkeng had partnered up with an entity called ‘Brutas Atlas Copco Industrials South Africa’. The latter entity supposedly holds the required accreditation.
We searched the CIPC’s database and couldn’t find any company registered under that name.
Further muddying the water is the fact that Bulkeng’s original bid submission made no mention of a joint venture partner.
Like a ghost
Daily Maverick tried, over the course of several days, to reach Bulkeng’s sole director. Like a phantom he persistently managed to evade us.
According to company records, one Emmanuel Nkosinathi Ndlovu founded Bulkeng in 2010. The company doesn’t have a website. We searched high and low for Bulkeng’s physical offices but couldn’t find any.
Bulkeng doesn’t appear to have any telephone numbers listed anywhere.
The CIPC records suggest that Bulkeng at one point had its offices in Klerksdorp, but the company no longer appears to be at that address. Ndlovu’s LinkedIn page, which reveals very little about the businessman, says he is based in Johannesburg.
In short, for a business that is about to embark on a substantial, highly complex health project, Bulkeng keeps a perplexingly low profile.
We managed to source a couple of phone numbers for Ndlovu, but he wouldn’t take our calls, nor respond to our texts and WhatsApp messages.
We wondered if the DoH didn’t perhaps share our concerns about the company the IDT picked for such an important project.
“The query can be directed to the IDT or Bulkeng to respond,” said the Department.
The other suppliers
The smaller portion of the roll-out, worth R152m, was awarded to a joint venture between Maziya General Trading and On Site Gas Systems International.
Like Bulkeng, Maziya does not possess a Sahpra licence. On Site Gas Systems, however, is registered with the body.
Asked about its experience in the medical space, Maziya’s CEO, Chris Delport, stated: “Our company has diversified its portfolio to work in relation to the medical field. Our extensive experience in the construction industry has partnered with the expertise and experience of On Site Gas Systems International, our JV partner… our JV is best placed to deliver on this contract.”
Maziya is no stranger to controversy.
In May this year, News24 published details about the company’s chequered past, after Maziya was appointed to do demolition work at the National Assembly – ravaged by a fire in 2022.
According to the news site, Maziya had once been fined by the Competition Commission for tender collusion relating to a City Power contract. What’s more, some of the company’s past government projects were allegedly mired by significant cost overruns.
We asked Delport about his company’s past controversies, but he ignored those queries.
Ballooning costs
The budget for the oxygen plants rose dramatically after the IDT assumed ownership of the bid process. This has prompted further concern among sources familiar with developments.
Initially, the DoH performed a detailed cost analysis and determined that the roll-out should cost roughly R256m, a far cry from the more than R800m now allocated to the project.
The DoH and the IDT both claimed that the much higher figure was brought on by “price escalations”.
“The initial budget of R256m excluded VAT, and it was only for the construction of the oxygen plants, but it was also based on the 2019 estimate; with escalation and Covid interruptions, the value increased, but also the indicated value of R256m excluded VAT, the professional fees, management fees, and maintenance costs (over 36 months),” explained the DoH.
Daily Maverick has, however, reliably established that the lower cost estimate was penned in late 2022 and not before the Covid pandemic. What’s more, Daily Maverick was made to understand that the R256m figure was an all-inclusive budget that provided for maintenance over a period of three years.
The IDT remained upbeat about the oxygen plants roll-out, notwithstanding the concerns. “The implementation of the programme will improve provision of health services across most rural and township hospitals… ensure that hospitals have adequate oxygen to provide improved health services.”
More of the same
This latest revelation about what appears to be yet another case of tender corruption may well prove that despite major political changes, corruption in the health sector continues unabated.
Millions of rands are still being stolen, writes Stephen Grootes in an analysis in Daily Maverick. The ANC appears to understand this and yet does nothing, which poses risks to the party’s coalition partners.
From what is publicly known, these events follow a similar pattern.
A company with virtually no public presence is chosen to provide a particular service, the value of the contract is dramatically inflated from its original price, the NDoH refuses to answer direct questions and the people who own the company avoid making any kind of comment.
If the owners of the company, the NDoH, the IDT or any of the other role-players in this gave a full explanation for their decisions, the story would be completely different.
Instead, their silence speaks for itself.
If there is large-scale corruption involved in this deal it would be no surprise.
It follows the Digital Vibes scandal and the looting of Tembisa Hospital, with virtually no consequences for those involved.
In the case of Digital Vibes, the person at the centre of it, former Health Minister Zweli Mkhize, has not gone to prison. Rather, he challenged President Cyril Ramaphosa for the leadership of the ANC in December 2022. (That he won almost 1 900 votes from ANC delegates suggests that those delegates had no problem with the serious corruption claims against him).
At Tembisa Hospital, a situation was created that appears to have been deliberately engineered to ensure there was corruption.
First, the late Ashley Mthunzi was appointed irregularly as CEO of the hospital. Then, when Babita Deokaran started to blow the whistle, she was murdered.
Finally, after the public pressure grew too intense, Mthunzi was suspended. His wife, Lerato Mthunzi, then used her leadership of the Young Nurses Indaba Trade Union to campaign against his suspension.
His disciplinary hearing was postponed endlessly and he died before there was a final verdict.
A failure to act
As usual, the ANC has simply failed to move against corruption.
The fact that Malusi Gigaba represents the party in Parliament, while David Mahlobo is still, inexplicably, a Deputy Minister in Ramaphosa’s Cabinet (despite the President’s own stated commitment to renewal) shows the party is very much still enabling corruption.
This may well inform the City Press report at the weekend about a “confidential” document discussed at the ANC’s national executive committee (NEC) meeting.
This document reportedly laments: “The corruption robs our people of billions that could be used for their benefit.”
It says the party’s leadership structures do not act against corrupt leaders, “either because they lack the means or the will, or are themselves held hostage by them”.
There is a long history of such documents that are discussed by the NEC. Often, the documents are startlingly honest. To the ANC’s eternal credit, such public “discussion documents” prepared ahead of conferences often give a proper assessment of the situation.
However, despite this tradition, they are almost always ignored.
BusinessLIVE reported that this weekend’s NEC meeting resolved to create an appeals mechanism for its Integrity Commission.
That is ludicrous. The Integrity Commission has been shown over the years to be utterly toothless. Allowing party members to appeal against its findings will only weaken a body that already has no impact in the party.
Besides, the NEC already has the final say over this commission’s resolutions, meaning disciplinary and integrity issues are already decided by a political body.
Dispensing patronage
All of this leads to the question, which has been asked many times, about whether the ANC is now a body kept together only by dispensing patronage.
Former Deputy Finance Minister Mcebisi Jonas, a man who saw the dark heart of State Capture, discussed this issue during his address at the Kgalema Motlanthe Foundation Inclusive Growth Forum 2024 at the weekend.
He said: “Much will depend on the ANC’s leadership capacity and whether it is prepared to forego the party-state-business patronage systems upon which leadership campaigns at all levels have been built.”
This suggests that nothing has changed since Motlanthe, in his role as ANC secretary-general, said back in 2007: “The rot is across the board.”
The difference now is that voters see this.
That is why the ANC has lost so much support, which was dramatically evidenced in the general election this year.
All of this poses strategic questions for parties in coalition with the ANC.
The IFP and the DA would want to capitalise on the ANC’s weakness – something that has been a major plank of their strategies in the past.
They may now have to remain true to their constituencies by publicly demanding answers from the ANC about this latest tender scandal.
The leaders of these parties will also want to avoid any impression that their presence in the coalition is both keeping the ANC in power and enabling this kind of corruption.
There is a risk that their constituencies signal that the parties should stop working with the ANC.
However, the big issue is that millions, presumably billions of rands, are still being looted. And looted from the National Department of Health, of all institutions.
White-collar crime like this has very real consequences – like the patients who suffer when hospitals run out of money to practise normal procedures or even to buy food.
We, as a country, and the National Department of Health, should have known better. Much better.
See more from MedicalBrief archives:
Digital Vibes: Health DG Sandile Buthelezi also suspended – more to come?
Health DG probed after R500 000 bribery allegations
‘Whistle-blower’ seeks Hawks protection at hearing
AG scathing about R150m health contract