THE Independent Development Trust (IDT) has defended the institution and said it followed the correct procurement process amid allegations of corruption at a multi-million-rand oxygen plant in the National Department of Health (NDoH).
This after Public Works and Infrastructure Minister Dean Macpherson wrote to the Chairperson of the IDT requesting a comprehensive report into how three companies were awarded a multi-million rand oxygen plant tender following the reports that the two companies.
The IDT is the implementing agent for the oxygen plant roll-out on behalf of the Department of Health where reports alleged that Bulkeng (Pty) Ltd and Maziya General Trading, in partnership with On Site Gas Systems International allegedly did not hold a SAHPRA license - were awarded tenders by the IDT to install complex technical pressure swing adsorption (PSA) oxygen plants at state hospitals across the country.
The Agency told the Sunday Independent it was confident that it followed the correct procurement processes in the appointment of contractors for the PSA Oxygen Plants.
“This is the first of its kind in South Africa and funded by Global Fund. The Global Fund also appointed KPMG to audit the procurement process that the IDT followed and they were satisfied with the procurement process, hence both the National Department of Health and Global Fund issued the IDT with a “No Objection” letter for IDT to continue with the procurement process,” said IDT spokesperson Phasha Makgolane
Explaining the process of appointing the companies, the IDT said 61 bids were received; after evaluation, only 8 bidders qualified for the next phase of evaluation.
“Two companies were appointed after they were requested to submit their pricing and were duly appointed after negotiations regarding pricing. The appointed companies are Maziya/On-Site Gas Systems JV and Bulkeng.
“The companies were allocated as per their bidding, therefore Bulkeng was appointed for 44 hospital sites, out of the 55 sites.”
Makgolane stated that both companies were based in South Africa, but added that the original equipment manufacturer might not be based in the country.
“All 55 hospital sites have been handed over to the contractors, and the contractors are in the process of procuring equipment and materials. No construction work has commenced on site.”
In a document seen by the Sunday Independent, as part of the response to the minister, the Agency said that accreditation by SAPHRA was not a “mandatory requirement” and mentioned that On Site Gas was accredited by SAPHRA
“In respect of Bulkeng (Pty) Ltd, the contractor submitted a working relationship confirmation letter to Atlas who is accredited by SAPHRA and Atlas confirmed that Brutes trading as BeaconMedaes is an accredited distributor of their products in South Africa and the working confirmation letter from Brutes to Bulkeng was submitted with the bid.
“The bid documents containing terms of reference and evaluation criteria for both panel and request for quotation did not require that bidders must be registered with SAHPRA, however, there was a requirement that the bidder/s must submit a letter confirming support from PSA original equipment manufacturer (OEM),” said Makgolane.
On the composition of appointed bidders, he stated that “the terms of reference did not require bidders to form a joint venture with accredited manufacturers but it mandated bidders to submit confirmation letters from OEM.”
“Client representatives participated in bid committees as per provisions of the Memorandum of Understanding.”
On costing and financial implications, Makgolane told the paper that the original allocation letter from NDoH dated September 8, 2022, indicated a budget allocation of R216 006 750 all-inclusive for 60 hospitals.
“The IDT invited bidders who are in the approved panel and the shortlisted bidders proved to be much higher than the initial allocation, which led to the BEC being authorized to conduct a price negotiation process to bring their costs lower.
“The three shortlisted bidders were invited for price negotiations and only two (2) bidders agreed to reduce their prices and they were appointed as per the work allocation provided in the award report.
“IDT also submitted the post-tender value for the projects to the NDoH for concurrence as required in the MOA, where the post-tender budget varies by more than 10% from the NDoh budget. Further approval, referred to as “no objection” was received from the Global Fund after conducting further due diligence,” he stated.
According to reports, the deal was signed off by the Health Department Director General Dr Sandile Buthelezi.
Buthelezi faces allegations R500,000 bribe he reportedly received in connection with the oxygen plant project the IDT was managing on behalf of the Department.
In September 2021, Buthelezi was placed on precautionary suspension following the Digital Vibes saga with an investigation into the alleged irregular contract led by the Special Investigating Unit into allegations that several officials in the health department benefited from the R150-million communications tender.
However, Buthelezi was cleared of wrongdoing in the Digital Vibes saga and reinstated to his post.