Report into R800m oxygen plant tender reveals irregularities, fraud
Public Works and Infrastructure Minister Dean Macpherson has released the findings of a forensic investigation into the R800 million Pressure Swing Adsorption Oxygen Plant tender.
The report revealed systemic procurement irregularities, fraud, and governance failures within the Independent Development Trust (IDT).
It also declared the bid evaluation process to have been deeply flawed.
The IDT awarded the contract on behalf of the Department of Health.
It appointed a service provider by the name of Bulkeng and other private contractors to install oxygen plants at 55 hospitals across the country with a budget of roughly R250 million. However, the budget later ballooned to R836 million.
Macpherson briefed the media in Pretoria on Tuesday.
He said the investigation, conducted by Price Waterhouse Coopers (PWC), found that Bulking did not qualify to be awarded the tender.
The report recommends disciplinary action against IDT CEO Tebogo Malaka, General Manager for Supply Chain Management Molebedi Sisi, and other officials.
Macpherson said he has written to the Hawks, briefed the Minister of Health, and the IDT Board to initiate consequence management.
He confirmed that the department would implement all recommendations as part of broader supply chain reform.
"These findings represent a monumental failure in governance and adherence to IDT and IDT policies and National Treasury regulations – undermining the integrity of public procurement and threatening donor funds,” the minister said.
"The report, therefore, confirms that multiple companies awarded work under the PSA project did not have valid SAHPRA licensing.
"One company, Bulkeng (Pty) Ltd, submitted a SAHPRA licence belonging to Atlas Copco Industrial SA - without the knowledge or consent of Atlas Copco.
"This was a clear misrepresentation; it was fraud. Moreover, Bulkeng intended to subcontract more than 25% of its responsibilities to Brutes Air Solutions, but failed to disclose this, in violation of the Preferential Procurement Regulations,” he told reporters.
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