R836m oxygen plants deal to be cancelled following ‘ghost contractor’ revelations

The National Department of Health (NDoH) has told the Independent Development Trust (IDT) that it no longer wants to continue with a controversial project to install oxygen plants at 55 government hospitals across the country. 

Daily Maverick and amaBhungane have previously revealed that the bulk of the R836-million was intended to go to a “ghost company” that didn’t process the necessary accreditation to install such equipment. The company, Bulkeng (Pty) Ltd, submitted allegedly fraudulent bid documents to clinch its R428-million contract. 

The bid process was administered by the IDT, which acted as the NDoH’s implementing agent for the project. 

On Monday, 9 December, the IDT’s board of trustees issued a media statement in which it noted “with serious concern” the allegations that Daily Maverick and amaBhungane had placed in the public domain. 

According to the statement, the NDoH had earlier written to the IDT to communicate its intention to withdraw from the contract.

“The [IDT’s] Board of Trustees have since directed the Management of [the] IDT to accept the Department of Health’s intention as communicated by the department,” read the statement. 

A quote attributed to the chairperson of the IDT’s board of trustees, Advocate Kwazi Mshengu, hinted at the serious allegations first raised in Daily Maverick and amaBhunange’s joint investigations. 

“These allegations cannot go untested as they bring the image of [the] IDT into disrepute. For [the] IDT to continue growing its business portfolio, it must demonstrate the capacity to deliver quality projects on time and within budget. The internal processes leading to the awarding of tenders and project management should be beyond reproach. Therefore, anything that smells of malfeasance should be nipped in the bud and those found to be responsible of such, shall face consequences management.”

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

Video: Watch – Inside “ghost” company’s R428m oxygen plants deal

The NDoH and the IDT will now have to seek a way to extricate themselves from the project without exposing themselves to any possible legal action.

“The teams comprising the IDT as well as the department should follow all applicable legal prescripts to avoid any unintended consequences of realising the intention of the Department of Health, and to ensure there is no litigation against both the IDT and the department,” read the statement.

The matter is already being probed by the Hawks.

“The IDT Management maintains that procurement processes were followed with regard to the PSA Oxygen Plant programme. Therefore, the Board of Trustees also welcomes and are encouraged by the fact that the Hawks are investigating the allegations pertaining to the project. The IDT team has and will continue to cooperate with the Hawks and provide all the necessary information at its disposal.”

The breaking development comes on the back of further queries Daily Maverick and amaBhungane had last week sent the IDT and the NDoH. 

Our queries relate to further red flags regarding the project, and point to the alleged involvement of senior government officials. 

Our latest investigation will be published tomorrow, Tuesday, 10 December.