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Global Fund deploys inspectors to probe R800m health contract after ‘ghost contractor’ exposé

The Global Fund is dispatching inspectors to South Africa to investigate the alleged tender fraud surrounding a ghost company that scored an R800-million oxygen plant contract.
Global Fund deploys inspectors to probe R800m health contract after ‘ghost contractor’ exposé Illustrative Image: Emmanuel Nkosinathi Ndlovu, listed founder of private contractor Bulkeng. (Image: Supplied) | Medical oxygen gas plant for hospital. (Image: Sourced) | Dr Sandile Buthelezi. (Photo: Gallo Images / Papi Morake) | Tuang Hospital. (Image: Facebook)

The Global Fund, one of the world’s largest health financiers, is sending its inspectors to South Africa in response to allegations of tender fraud linked to an R800-million contract it funded, exposed in a joint Daily Maverick and amaBhungane investigation.

On Wednesday, Health Minister Aaron Motsoaledi made the announcement during his oral reply to questions posed in the National Assembly. He was answering a question by DA member Michéle Clarke. TimesLive first reported on the announcement.

Last month, Daily Maverick broke the news of “ghost company” Bulkeng being awarded the lion’s share of the contract to install oxygen plants at 55 hospitals across South Africa. A subsequent joint Daily Maverick and amaBhungane investigation found evidence of potential tender fraud in the documents Bulkeng submitted for the contract.

“When this story broke, it disturbed all of us, including [President Cyril Ramaphosa], who wrote me a letter to present to him a report within 14 days,” Motsoaledi told the National Assembly.

Read more: ‘Ghost company’ bags R428m oxygen plants tender for state hospitals

According to Motsoaledi, the project is funded by the Global Fund, a Geneva-based powerhouse coalition of governments and civil society organisations dedicated to fighting Aids, tuberculosis and malaria. It is “the world’s largest multilateral funder of global health grants in low- and middle-income countries”, according to its website.

“When the story broke, I was in Brazil and the Global Fund was there,” said Motsoaledi.

“We met and they promised that they too would send their own inspectors to investigate this matter.”

The Global Fund donates R10-billion every three years to South Africa, added Motsoaledi. During Covid-19, it set its target on acquiring oxygen plants for South African hospitals when it heard that facilities had run out of oxygen.

“That’s why they decided that part of the money must now be used to put oxygen plants in 55 hospitals so that, in future, the hospitals will no longer issue tenders for oxygen, and they will be self-sufficient,” said Motsoaledi.

He explained that his department delegated procurement to the Independent Development Trust (IDT), a government infrastructure implementing agency reporting to the Department of Infrastructure Development under Minister Dean Macpherson.

“For this issue, because we are just a client department, it is [Macpherson] who is busy investigating this issue, but I talk to him every day about it, including today, to get to the bottom of this,” said Motsoaledi.

“I can assure you that it is being investigated by Minister Macpherson, because IDT accounts to him. I am working with him, and the Global Fund is independently going to investigate this matter because this is their money. Then they will be able to bring out the findings.”

Daily Maverick revealed last month that the contract to install the highly technical pressure swing adsorption (PSA) oxygen-generating plants ballooned from R256-million to R836-million.

Bulkeng managed to clinch the lion’s share of the contract — about R400-million — despite the company having no online presence, no certification from the South African Health Products Regulatory Authority (Sahpra) and a very elusive director, Nkosinathi Ndlovu.

A subsequent joint investigation by amaBhungane and Daily Maverick found more damning evidence that Bulkeng had seemingly used a Sahpra certificate belonging to a third-party company without that company’s knowledge, and a witness signature used in its offer letter to the IDT may have been forged.

Read more: Alleged tender fraud, shock ‘death’ of contractor cloud R836m hospital oxygen plants project

Bulkeng also seemingly used a business address in Sandton to tender for the contract when it no longer occupied those offices.

Days after Daily Maverick and amaBhungane finally met with Ndlovu, he was purported, via X (formerly Twitter), to have died; however, attempts to verify this at police stations, mortuaries and via the police were unsuccessful. DM

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Comments (10)

Rod MacLeod Nov 14, 2024, 07:39 AM

And thus Aaron escapes again. Of course, the IDT under the Ministry of Infrastructure Development was responsible for this health services contract. Take a bow, Minister Dean Macpherson, you're centre stage. Hope the record of your dealings with Aaron is in writing.

beecee.macpherson Nov 14, 2024, 08:16 AM

Don't spend a huge amount of money on an investigation by the foreign Global Fund. Daily Maverick and amaBhungane will do it for a lot less - and probably more efficienly!

Gerhard Vermaak Nov 14, 2024, 08:35 AM

And as usual CR is shocked................... :-(

Richard Blake Nov 15, 2024, 09:53 PM

????

Mike Schroeder Nov 14, 2024, 09:32 AM

So (DA) minister MacPherson is now responsible? Ahhh but who was in charge of overseeing IDT when the tender was issued and awarded, ie. did this happen before or after the GNU?

Glyn Morgan Nov 14, 2024, 01:05 PM

Way before BNU Zero.

Indeed Jhb Nov 14, 2024, 09:44 AM

Interesting, 10 bill every 3 yrs? I wonder what happened to the money - maybe that should also be investigated. Dr M pointing finger away - who drafted the tender specs surely not IDT what do they know about this stuff? They can project manage the contract, the process not the detail.

D'Esprit Dan Nov 14, 2024, 11:47 AM

Everyone involved must be chucked in prison and have all of their wealth confiscated. Absolute scum.

svaneeden556 Nov 14, 2024, 03:04 PM

Reported on X that Ndlovu conveniently 'died'?! Only days after amaBhungane met with him? This should be thoroughly investigated. It is telling that there has been no confirmation from the police (or mortuaries...)

boomabergh Nov 15, 2024, 07:11 AM

It's time to get rid of the tender system. It's nothing but a tool for the powerful in this country to put money in their own pockets.

Richard Blake Nov 15, 2024, 09:56 PM

Wait for the NHI. The ANC is going to loot on a scale the world has never seen before.

amuhnkuna Dec 4, 2024, 10:01 AM

This stinks to high heaven. I wonder which grubby and dim-witted ANC cadre this will lead back to. Minister Dean McPherson, under whose portfolio the IDT sits, should immediately release the Global Fund report as soon as it is available.