Covid-19 tender-related fraud rages unabated

The Special Tribunal set up to investigate and prosecute cases related to corruption in the multi-million rand procurement of Covid-19 personal protection equipment by the state is to hear the review application, SIU (Special Investigating Unit) v Pro-Serve Consulting (Pty) Ltd and Thenga Holdings (Pty) Ltd (GP20/2021), on Tuesday (November 16).

The matter relates to the R50 million alleged tender irregularities in regard to the refurbishments and upgrades at the AngloGold Ashanti (AGA) Hospital in Carletonville, Gauteng.

Refurbishment contract

With the advent of the Covid-19 pandemic, the Gauteng Department of Health (GDH) and Department of Infrastructure Development (ID) appointed a contractor to refurbish the AngloGold Ashanti Hospital.

The facilities were to be refurbished and fitted with between 200 and 250 beds. The radiology unit required major refurbishments, including new equipment for the operating theatre unit. The total cost was R50 million.

The GDH and ID appointed and paid Pro-Serve Consulting for the services, which the SIU alleged were “rendered in terms of the impugned transactions”. Thenga Holdings is alleged to have received an amount of R40.8 million in connection with its construction and related works rendered at the AGA Hospital.

The GDH and ID appointed Pro-Serve and Thenga as the “implementing agent” for the provincial health department.

The papers allege that “Pro-Serve was appointed to render professional architect, electrical and mechanical engineering, civil and structural engineering, health and safety consultants and clinical services”, whereas Thenga Holdings would “provide general construction work”.

It is alleged that Pro-Serve entered into the service level agreement (SLA) with the Department of Infrastructure Development on April 13 and 21, 2020. The SLA was concluded on an “emergency basis”.

Thenga’s access certificate alleged that the completion date of the project was May 30, 2020, such date having been extended by the Department of Infrastructure Development to June 30, 2020.

As at June 18 the refurbishments costs were estimated at some R588 million – more than 10 times the original estimate.

Review application

The SIU alleged that:

• The procurement process was flawed, unlawful and invalid;
• No consideration was given to the Treasury Regulations and Instructions Notes;
• No consideration was given to the scope of work;
• The procurement rules were violated;
• The appointment of Thenga Holdings was done by a panel whose legal mandate had expired; and
• No explanation was given for the increase in the costs of the refurbishment from an estimated R50 million to estimate of R588 504 235.43 as at June 18, 2020.

The SIU obtained an interim preservation order interdicting Pro-Serve and Thenga and freezing amounts of R1 706 301.60 and R6 234 365.26 respectively on September 17, 2021.

Both Pro-Serve and Thenga are opposing the review application.