The Department of Health is to re-tender the controversial oxygen plant contract – this after the suspension last week of Independent Development Trust (IDT) CEO Tebogo Malaka linked to the R836m-project scandal, although no formal finding of misconduct has been made against her.
This intends to ensure an “independent and unhindered” continuation of the investigation, the IDT told Daily Maverick.
The PwC forensics report, commissioned in January 2025 and released by Public Works & Infrastructure Minister Dean Macpherson on 29 July, called for disciplinary action against Malaka for failing to prevent or act on violations that may have cost the state hundreds of millions of rands.
Public Works & Infrastructure Deputy DG Carmen-Joy Abrahams, seconded by Macpherson, will hold the reins as acting CEO while investigations continue.
The case is tied to the issue of the IDT, acting as an implementing agent for the Department of Health, being tasked with rolling out pressure swing absorption (PSA) oxygen plants to 55 hospitals, but which the probe uncovered as “a textbook case of public-sector malfeasance”.
The report exposed extraordinary procedural failings and regulatory breaches, including that a shell company, Bulkeng (Pty) Ltd, with no premises, staff or track record, was awarded a R428m contract for the project.
It submitted forged documents, falsely claimed a joint venture with a fictitious entity, and was not accredited by the South African Health Products Regulatory Authority (SAHPRA).
The cost of the project, originally capped at R216m by the Global Fund, ballooned to more than R836m – and yet by December 2024, not a single oxygen plant had been commissioned.
Malaka in the firing line
The PwC report recommends disciplinary action against Malaka for various failures: signing off on irregular procurement procedures, failing to ensure compliance with SAHPRA regulations, and allowing the Department of Health undue influence over IDT tender committees.
The PwC report also found that key procurement safeguards were ignored, including the acceptance of Bulkeng’s bid documents after deadlines had passed and the appointment of Department of Health officials, who were supposed to be observers, as voting members of the bid evaluation committee.
She is also faulted for ignoring concerns raised by her own supply chain management team and by Department of Health infrastructure officials.
New Board
A new full-term IDT board has been appointed by Cabinet, the goal being to “restore governance and compliance frameworks” and “rebuild the reputation of the IDT”, according to Macpherson.
The Department of Health is now preparing to re-tender the oxygen plant project, but precious time has been lost, and patients in under-resourced public hospitals are still waiting for the life-saving infrastructure they were promised.
Daily Maverick article – IDT CEO suspended over R836m tender irregularities (Open access)
See more from MedicalBrief archives:
Forensic report exposes extent of state hospital oxygen tender fraud
‘Ghost company’ bags R428m oxygen plants tender