The Development Bank of South Africa (DBSA) appears to have awarded a new R379m contract for hospital PSA oxygen plants countrywide to companies previously disqualified in the red-flagged Independent Development Trust (IDT) tender process for the same equipment, News24 reports.
One of those companies, BC Gas Installations Cape Town, seems to have bid for the now-cancelled IDT tender using a competitor’s email address – a competitor still holding an active IDT contract, according to internal IDT procurement documents seen by News24.
Six of the 10 companies shortlisted for DBSA’s contract also competed in the IDT process, raising questions about how much has changed despite Health Minister Aaron Motsoaledi’s intervention to shift the controversial tender to the DBSA.
The IDT was originally tasked with handling the procurement process and project management for the nearly R1bn project – funded by the Global Fund – on behalf of the National Department of Health.
However, after an investigation and subsequent media reports by amaBhungane and Daily Maverick, a PwC investigation confirmed multiple irregularities in the award.
Motsoaledi then terminated the IDT’s mandate and transferred the tender to the DBSA, except for a contract with a Maziya General Services and On Site Gas Systems International joint venture to deliver oxygen plants to 10 sites.
That contract was left “as it was” with the IDT after the DBSA expressed concern that Maziya could institute court action.
The DBSA process has not been subjected to any formal investigation, and no official findings of wrongdoing have been made.
Same game
The DBSA awarded Ecomed Medical the contract for 29 hospitals while BC Gas secured 16. The combined cost is R379 203 094.
DBSA’s group executive for infrastructure delivery, Chuene Ramphele, told News24 that the IDT and DBSA processes were not comparable and that the DBSA’s procurement strategy “produced different results”.
“The DBSA may not comment on processes of IDT. The DBSA ran its own procurement process, which details the applicable due diligence criteria,” he said
News24 understands that DBSA disqualified the only two South African manufacturers of PSA oxygen plants – Foxolution Systems Engineering and O2 Africa. The remaining companies have partnered with original equipment manufacturers (OEMs) and will import PSA oxygen plants from abroad.
Different players
News24 has uncovered possible links between BC Gas, OSG International, and On Site Gas Systems, which, if connected, appear to have presented themselves as independent competitors while bidding for the same IDT contract.
Documentation from the IDT’s site briefing on 7 July 2023 reveals that an official named Gregg Edwards attended on behalf of BC Gas but used an “osginternational” email domain for his contact details. Edwards’ LinkedIn profile identifies him as an engineer employed by OSG International, not BC Gas.
BC Gas director Darien Edwards is the son of Gregg Edwards. According to an old OSG International website from 2010, Gregg Edwards is listed as having “headed up” the company.
OSG International is directed by Rodney Gidish, a director of On Site Gas Systems – the company awarded the still-active IDT contract alongside joint venture partner Maziya General Services.
The connection could indicate that On Site Gas Systems was given a second bite at the lucrative contract.
BC Gas did not advance far in the IDT’s process after being appointed to its panel of contractors in 2023.
In that process, the company scored 35 out of 40 points for past experience, claiming to have completed three PSA oxygen plant installations. However, the company’s functionality score sheet reveals two different scores. It first scored 80 out of 100 on a written score sheet, and then 60 out of 100 on an electronic version, in IDT documents seen by News24.
While Gidish denied any relationship with Darien and Gregg Edwards, he did not explain why Edwards was still using an OSG International email address.
Gidish said the only connection between himself and Gregg Edwards was a “permanent parting of ways” in 1997 when Edwards disposed of his shareholding in On Site Gas Systems to Gidish.
“The writer [Gidish] and On Site Gas Systems International [Pty] Ltd have made avoiding Gregg Edwards and any of his identified entities a fundamental principle of business operation and existence. BC Gas is an arm’s-length … entity and a direct competitor to On Site Gas Systems International,” Gidish said.
Darien Edwards referred News24’s questions to the DBSA.
Gregg Edwards also declined to comment, except to say he had no involvement with any of Gidish’s companies and had used the email address in question for decades.
A Companies and Intellectual Property Commission search reveals Gregg Edwards was registered as a director of OSG International alongside Gidish as far back as 1996.
However, the official record does not indicate when he resigned from this position.
Regarding On Site Gas’ active contract with the IDT, Ramphele said On Site Gas had tendered as a separate entity from Maziya and was fairly adjudicated.
“A company may not be excluded from tendering for additional works, unless specific conditions were stipulated in that regard. There is no redundancy at all.
“The appointed team was involved in the evaluation process …evaluation was based on the tender criteria. Such findings …. may not be disclosed.”
Gidish said the IDT tender “is not the same tender in respect of the same PSA oxygen plants”.
A second chance
The DBSA’s winning bidder scoring the major share of the contract is Ecomed Medical, which scored only 30 points in the IDT’s functionality test and was disqualified in that process. It remains unclear why the company was awarded the largest share of the contract, as it did not appear on the IDT’s list of bids received on time.
Greg de Freitas, Ecomed’s director, said the company had more than 16 years’ experience in PSA oxygen plants, adding that he did not receive reasons for its disqualification in the IDT process. He referred other questions to the DBSA.
Bulkeng won the largest share of the IDT’s contract, but subsequent investigations uncovered a catalogue of fraud: forged signatures, falsified official records, and a lack of the proper Construction Industry Development Board (CIDB) grading stipulated in the project specifications.
Another DBSA-shortlisted company is Brutes Air Solutions, which tendered with Bulkeng in its irregular IDT bid submission.
Bulkeng has no previous experience whatsoever with PSA oxygen plants. Its business address listed in the bid submission was no longer operational. And while the IDT claimed that Bulkeng and Brutes Air were operating in a joint venture partnership, that claim was demonstrably false.
Brutes Air Solutions director Christo Bruwer said Bulkeng was merely Brutes Air Solutions’ “customer” in a commercial relationship. In any case, Bulkeng did not hold the required SAHPRA certificate. Instead, the company used a SAHPRA certificate belonging to a third company, Atlas Copco, without its knowledge.
According to the PwC investigation, commissioned by Public Works and Infrastructure Minister Dean Macpherson, “Bulkeng intended to subcontract more than 25% of its contractual responsibilities to Brutes Air Solutions but failed to disclose this arrangement, in violation of preferential procurement regulations”.
Responding to News24, Bruwer said Brutes Air tendered by itself and not through another company for the DBSA contract and clarified that it has installed PSA oxygen plants “across Africa”.
He said the company held a valid SAHPRA certificate and was not operating with any other company’s certification.
News24 asked the DBSA whether it was a concern that Brutes Air had been shortlisted again despite its involvement in irregularities, and whether the entire shortlist gave the impression that little had changed in the new process.
Ramphele responded: “The PWC report was based on the IDT process and did not conclude in any formal blacklisting or similar legal action. Excluding any formal charges, a company cannot be excluded without formal evidence and a formal conclusion. The DBSA procurement strategy should not be compared with the previous one undertaken by the IDT.”
See more from MedicalBrief archives:
Forensic report exposes extent of state hospital oxygen tender fraud
Dodgy R836m oxygen plants deal cancelled
‘Ghost company’ bags R428m oxygen plants tender