![\"\"](\"https:\/\/further.co.za\/amabwp\/wp-content\/uploads\/2024\/12\/Dr-Sandile-Buthelezi-NDoH-FB.jpeg\")
We can also reveal that the IDT, ostensibly with Buthelezi\u2019s consent, ran afoul of the 2022 implementation plan by omitting or circumventing key requirements, including those related to the bidders\u2019 South African Health Products Regulatory Authority (SAPHRA) registration status and their gradings from the Construction Industry Development Board (CIDB).<\/p>\n\n\n\n
We will also detail how the IDT apparently allowed Bulkeng to slip key documents into its bid bundle more than a year after the tender had closed.<\/p>\n\n\n\n
Finally, we will highlight some of the statements the IDT and the NDoH made in relation to the project, illustrating how the IDT in particular has apparently been disseminating patently false or misleading claims.<\/p>\n\n\n\n
We sent the IDT and the NDoH detailed queries regarding each matter unpacked in this piece. Both organisations vowed to respond but failed to do so before our deadline.<\/p>\n\n\n\n
Instead, the IDT\u2019s board of trustees on Monday afternoon issued its statement. The board said it \u201cnoted with serious concern\u201d the allegations regarding the project.<\/p>\n\n\n\n
\u201c…anything that smells of malfeasance should be nipped in the bud and those found to be responsible of such, shall face consequences management\u201d, the board\u2019s chairperson, Adv. Kwazi Mshengu, was quoted as saying.<\/p>\n\n\n\n Vital bid requirement dropped<\/strong><\/p>\n\n\n\n Documents in our possession, including Bulkeng\u2019s company records and the IDT\u2019s request for quotations (RFQ), point to a flawed procurement process, one that allegedly saw Bulkeng appointed at an inflated cost despite the fact that it wasn\u2019t qualified for the project.<\/p>\n\n\n\n The procurement process, a two-pronged affair, was concluded in 2023.<\/p>\n\n\n\n First, the IDT advertised a tender to appoint contractors to a panel of would-be suppliers. More than sixty entities submitted bids, and in June last year the IDT appointed eight companies to the panel.<\/p>\n\n\n\n Next, in July 2023, the IDT issued RFQs to the panel members and eventually picked Bulkeng and the Maziya\/On Site Gas JV for the roll-out.<\/p>\n\n\n\n Much of the controversy around Bulkeng\u2019s appointment stems from its SAHPRA certification \u2013 or rather lack thereof.<\/p>\n\n\n\n In our previous reports, we detailed that Bulkeng had never been registered with SAHPRA, and that it had submitted another entity\u2019s certificate to the IDT.<\/p>\n\n\n\n The IDT has since repeatedly claimed that a SAHPRA certificate was never a mandatory requirement for bidders, but we can now illustrate why this statement is disingenuous.<\/p>\n\n\n\n An infrastructure programme implementation plan, or IPIP, signed in August 2022 by various NDoH and IDT officials, forms the basis for the oxygen plants project.<\/p>\n\n\n\n The IPIP document very clearly states that SAHPRA certification needed to be factored into the IDT\u2019s procurement process.<\/p>\n\n\n\n When the IDT issued its tender and RFQs, the SAHPRA requirement was somehow omitted, which would have opened the door to unqualified companies like Bulkeng.<\/p>\n\n\n\n Construction Industry Development Board<\/strong><\/p>\n\n\n\n The 2022 implementation plan also called on the IDT to manage the procurement process in line with the CIDB\u2019s requirements.<\/p>\n\n\n\n Unlike the SAHPRA specification, the CIDB requirement did make it into the IDT\u2019s tender, although the threshold was quite low.<\/p>\n\n\n\n Companies with a mechanical engineering (ME) grading of five and higher were allowed to submit bids.<\/p>\n\n\n\n A grading of five limits companies to a project value of R10-million or less. Considering the project\u2019s initial budget of R216-million, the grading requirement seems to have been far too generous.<\/p>\n\n\n\n Bulkeng has an ME grading of eight, so it easily cleared this minor hurdle. However, the company\u2019s grading still only qualifies it to work on projects with a maximum value of R200-million.<\/p>\n\n\n\n It is therefore unclear how the IDT managed to appoint the company for a R428-million contract.<\/p>\n\n\n\n The IDT\u2019s uneven application of the CIDB requirement raises another red flag.<\/p>\n\n\n\n According to a submission by the IDT\u2019s Management Bid Adjudication Committee (MBAC) dated October 2023, at least one of Bulkeng\u2019s rival bidders was disqualified from the bid because the contract value would have exceeded its CIDB limit. It is unclear why the IDT did not apply the same standard to Bulkeng.<\/p>\n\n\n\n Enter the DG and the CEO<\/strong><\/p>\n\n\n\n In July 2023, Bulkeng, the Maziya\/On Site Gas JV and three other companies submitted their quotations to the IDT. The bids were staggeringly high, with the lowest among the lot coming in at more than double the R216-million budget.<\/p>\n\n\n\n The Maziya\/On Site Gas JV\u2019s quote came to R862.6-million, while Bulkeng said it would do the job for an eye-watering R1.18-billion.<\/p>\n\n\n\n Word soon spread among NDoH and IDT officials that the project\u2019s budget would be raised to accommodate the sky-high bids.<\/p>\n\n\n\n Naturally, the development sparked concern over the potential legal and auditing implications. The project already had a set budget. Any attempt to pour additional funds into the roll-out risked triggering an irregular expenditure finding.<\/p>\n\n\n\n The matter came to a head in early August 2023, at a meeting held by the project\u2019s steering committee, a seven-person body that consisted of officials from the NDoH and the IDT, plus an external auditor.<\/p>\n\n\n\n The committee, in a formal resolution, decided that it would be best to restart the procurement process, citing the escalating budget and the SAHPRA requirement\u2019s omission from the RFQ as the main reason for doing so. They also referenced the CIDB issue.<\/p>\n\n\n\n The committee sent a letter to the IDT\u2019s CEO, Malaka, requesting that the process be restarted.<\/p>\n\n\n\n But Malaka never responded to the committee. Instead, it seems she chose to directly consult with Buthelezi, the health department\u2019s DG. We know this because later that month, Buthelezi allegedly told the committee that he\u2019d spoken to the IDT\u2019s CEO. He allegedly told the committee\u2019s members that he was happy for the IDT to continue with the bid process.<\/p>\n\n\n\n By all appearances, Malaka and Buthelezi had effectively brushed aside the committee\u2019s concerns.<\/p>\n\n\n\n Their apparent disregard for the cost considerations is seemingly manifested in a \u201cconcurrence approval\u201d, signed by both officials in October 2023. The document sought to raise the program\u2019s budget to R987.4-million, a jaw-dropping R771-million more than the IPIP budget from the previous year.<\/p>\n\n\n\n According to our sources, this was a bridge too far for the Global Fund, which apparently instructed the IDT and the NDoH to formulate a more realistic figure.<\/p>\n\n\n\n A second \u201cconcurrence approval\u201d, signed by Buthelezi in February 2024, introduced a budget of R580-million. Malaka\u2019s signature also appears on this document, but it is not clear when she signed it.<\/p>\n\n\n\n The R580-million figure is exactly enough to cover the contracts awarded to the two winning bidders, but this was not the final project budget. The IDT and the NDoH have both confirmed that the budget had been set at R836-million. This means they had somehow released an additional R256-million. It is not clear when this figure was adopted by the two state bodies and whether it had been cleared by the Global Fund. It is also not clear which contractors, if any, were going to benefit from the additional spend, although the NDoH previously indicated that the R836-million budget included \u201cprofessional fees, management fees and maintenance costs\u201d for the oxygen plants.<\/p>\n\n\n\n The appointment of Bulkeng and the Maziya\/On Site Gas JV, meanwhile, was finally concluded in June 2024. Malaka signed the letters of intent that reflect the \u201cfinal allocation\u201d of the two bidders\u2019 respective sites.<\/p>\n\n\n\n After the fact <\/strong><\/p>\n\n\n\n The Bulkeng contract that Malaka and Buthelezi green-lighted seems dubious for yet another reason.<\/p>\n\n\n\n The RFQ called on bidders to submit letters of support from whichever Original Equipment Manufacturer (OEM) they\u2019d chosen to work with. Where relevant, the bidders also had to furnish the IDT with signed JV agreements.<\/p>\n\n\n\n Our assessment of Bulkeng\u2019s bid documents strongly points to a flawed and possibly unlawful bid process. All indications are that Bulkeng failed to comply with key mandatory requirements and that the IDT nevertheless allowed the company to clinch the lion\u2019s share of the project\u2019s roll-out.<\/p>\n\n\n\n As far as we could establish, Bulkeng\u2019s original bid submission did not include a letter from its chosen OEM, nor one from Brutes Air Solutions, the company we previously identified as Bulkeng\u2019s partner in the bid.<\/p>\n\n\n\n What we did discover, however, is a letter from Brutes Air\u2019s CEO, Christo Bruwer, addressed to the IDT. According to the heading, the letter serves as \u201cOfficial Confirmation of Collaborative Partnership with Bulkeng for PSA Oxygen Plants\u201d. But the letter is dated 25 July 2024, so we have strong reason to suspect that the IDT entertained this crucial document a full year after the RFQ had closed.<\/p>\n\n\n\n Bruwer claimed there had been \u201ca few versions\u201d of the letter, including one that had been submitted in time for the 2023 RFQ. We asked him for a copy of the earlier version, but he said he couldn\u2019t share it with us without the IDT and Bulkeng\u2019s consent. Bruwer wouldn\u2019t say why it had been necessary for him to draft a 2024 version.<\/p>\n\n\n\n Bulkeng\u2019s letter from its OEM, or lack thereof, should also raise eyebrows.<\/p>\n\n\n\n The company\u2019s bid included a letter that explained its relationship with Brutes Air and its OEM, Atlas Copco, dated 17 July 2023.<\/p>\n\n\n\n However, Atlas Copco only submitted a letter to the IDT on 10 October 2024, more than a year after the RFQ had closed.<\/p>\n\n\n\n What\u2019s more, the letter doesn\u2019t do much for Bulkeng\u2019s cause as a bidder. It merely states that Brutes Air is an \u201cauthorised partner\u201d of Atlas Copco. Bulkeng therefore failed to submit a letter that affirmed its own agreement with an OEM.<\/p>\n\n\n\n Under normal circumstances, Bulkeng\u2019s failure to adhere to these bid requirements should have disqualified the company from the process.<\/p>\n\n\n\n Soaring costs <\/strong><\/p>\n\n\n\n The IDT has made several dubious claims regarding the oxygen project\u2019s ballooning costs.<\/p>\n\n\n\n Following our first reports on the issue, the organisation went as far as claiming that the original R216-million budget was for fifteen hospitals, not sixty.<\/p>\n\n\n\n The IDT\u2019s spokesperson, Phasha Makgalane, claimed in a live interview with Newzroom Africa that the R216-million budget was compiled as far back as 2017.<\/p>\n\n\n\n Elsewhere, the IDT has claimed that the budget was formulated in 2019 and therefore had to be adjusted to account for inflation. It has also claimed that the lower figure excluded VAT and maintenance costs, claims the NDoH has also repeated.<\/p>\n\n\n\n None of this is true.<\/p>\n\n\n\n The August 2022 IPIP clearly shows that the R216-million figure was less than a year old when the RFQ went out. What\u2019s more, the budget covered the roll-out of oxygen plants at sixty hospitals, including VAT, installation costs and maintenance.<\/p>\n\n\n\n We compared the IPIP to the bill of quantities the IDT later issued with the RFQ. This exercise explained why the costs had risen so dramatically.<\/p>\n\n\n\n The Tshepong Hospital in North West, for instance, required only one small (10Nm\u00b3\/h or 15Nm\u00b3\/h) PSA plant at a cost of roughly R2.84-million, according to the 2022 IPIP. However, the IDT altered the bill of quantities so that bidders were required to submit quotes for two large (40Nm\u00b3\/h) plants. This meant the eventual costs would be far higher.<\/p>\n\n\n\n The IDT appointed the Maziya\/On Site Gas JV to install the plants at this hospital, which the JV would have done at a cost of R24.4-million \u2013 a hefty 757% increase from the original IPIP budget.<\/p>\n\n\n\n Bulkeng, meanwhile, was appointed to install a large plant at the St. Andrews Hospital in KwaZulu-Natal. It would have done so at a cost of R13.9-million. The 2022 budget, meanwhile, called for a small plant at a cost of only R2.84-million. A large plant, according to the IPIP, should in any case only have incurred a cost of roughly R8.5-million \u2013 still far less than what Bulkeng would have gotten.<\/p>\n\n\n\n At the Jubilee District Hospital in Gauteng, where one large plant would have sufficed, Bulkeng was set to install two large plants at a cost of nearly R28-million, a far cry from the R8.5-million budget envisioned in the implementation plan.<\/p>\n\n\n\n We looked at all 45 sites assigned to Bulkeng. Nearly every hospital that required only a small plant, as per the 2022 IPIP, was upgraded to a medium or a large one. The sites awarded to the Maziya\/On Site Gas JV were given the same treatment.<\/p>\n\n\n\n Maziya\u2019s CEO, Chris Delport, strongly denied that his company was trying to fleece the IDT through excessive pricing.<\/p>\n\n\n\n He emphasised that the bidders had no say in the drafting of the bill of quantities, and that Maziya and its JV partner merely submitted their quotes in accordance with the RFQ.<\/p>\n\n\n\n Delport said there were several factors that contributed to the quoted fees, including the cost of installing and maintaining the plants. He said his company had factored in a mark-up of no more than fifteen percent.<\/p>\n\n\n\n \u201cSome of the sites are in rural, far-flung places, so it costs more to go out there and install the plants. And none of these machines are manufactured in South Africa, remember, so there are import costs to consider too,\u201d explained Delport.<\/p>\n\n\n\n We showed the project\u2019s figures to an industry expert who told us that the numbers for the IDT project were \u201cpure madness\u201d.<\/p>\n\n\n\n This person, who has been involved in several PSA installations across the continent, reckoned that the roll-out could be done at a total cost of around R350-million.<\/p>\n","protected":false},"excerpt":{"rendered":" Signed appointment letters and related documents reveal that the National Department of Health’s (NDoH) top official and his counterpart at the Independent Development Trust (IDT) played key roles in an allegedly unlawful project to install oxygen plants at state hospitals….<\/p>\n","protected":false},"author":22,"featured_media":32123,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-32111","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/32111","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=32111"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/32111\/revisions"}],"predecessor-version":[{"id":32147,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/32111\/revisions\/32147"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/32123"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=32111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=32111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=32111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/further.co.za\/amabwp\/wp-content\/uploads\/2024\/12\/timeline-revised-617x1024.png\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/further.co.za\/amabwp\/wp-content\/uploads\/2024\/12\/PSA-Plant-1024x911.jpg\")
![\"\"](\"https:\/\/further.co.za\/amabwp\/wp-content\/uploads\/2024\/12\/St-Andrews-Hospital-from-KZN-DoH-website.jpg\")
![\"\"](\"https:\/\/further.co.za\/amabwp\/wp-content\/uploads\/2024\/12\/Tebogo-Malaka-X-IDT-.jpeg\")
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<\/figure>\n\n\n\n![\"\"](\"https:\/\/further.co.za\/amabwp\/wp-content\/uploads\/2024\/12\/Chris-Delport-from-Maziyas-website-1-1024x1009.png\")