Health4Sale Part 3: Mpumalanga department of health broke rules for controversial ambulance company
By Marcus Low and Anso Thom
The Mpumalanga Department of Health has defied guidance from its provincial treasury and acted in contravention of the Public Finance Management Act in awarding a three-year contract to Buthelezi HEMS, a joint venture between a controversial private ambulance company called Buthelezi EMS and HALO Aviation. This has emerged from court documents obtained by Spotlight.
Spotlight has previously reported on complaints about the quality of service
provided by Buthelezi EMS’s ground ambulances. Presently, contracts between Buthelezi EMS and the North West Department of Health is being investigated by the Hawks and as part of a “forensic investigation” launched by North West Premier Supra Mahumapelo.
Up until June 2016 aeromedical services in Mpumalanga were provided by the South African Red Cross Air Mercy Service (AMS), a non-profit. The service was provided in terms of a national treasury-administered tender called RT-79 2015. In June 2016 RT-79 2015 was cancelled by treasury due to a technicality regarding a utilisation factor that was not declared in the tender specifications.
Rather than continuing with the existing service provider, AMS, both Mpumalanga and Limpopo opted to switch to Buthelezi HEMS within days of the cancelling of RT-79 2015. This is despite the fact that Buthelezi HEMS did not have an aeromedical presence in either province.
According to Farhaad Haffajee of AMS this was strange because AMS was already delivering a service in these provinces and “there was no question from the Provinces (or anyone else) of the quality of service provided by the AMS or any other problems at all with the AMS service during the time that the AMS operated in these Provinces. In addition, there was a break in the service being provided from the time the AMS was told to stop providing the service to when a non-existent replacement service (Buthelezi) could actually start the service again in these Provinces.”
Haffajee also alleges that AMS was not approached to quote for the continuation of the service “despite having the aircraft, staff and infrastructure already in place.”
The paper trail
A protracted court process followed the cancelation of RT-79 2015, first in the North Gauteng High Court and culminating more than a year later with the Supreme Court of Appeal ruling in November 2017 that RT-79 should be reinstated and AMS should return to provide the service in the relevant provinces, Mpumalanga and Limpopo. It is during these court proceedings that it emerged that the Mpumalanga Department of Health ignored a warning from their provincial treasury that granting Buthelezi HEMS a three-year contract is not allowed in terms of the PFMA.
On 29 June 2016 Dr Savera Mohangi, Head of the Mpumalanga Department of Health, wrote to the province’s treasury indicating that the department wished to piggy-back on a contract between the Free State Department of Health and Buthelezi HEMS rather than going through a tender process. Such piggy-backing on tenders in other provinces is allowed by the PFMA in certain specific cases.
In her motivation for proceeding with the contract for aeromedical services Mohangi claims that there are critical patients that cannot be transported by road “due to their conditions which would result in loss of life due to prolonged transportation times as well as the non-suitability of the road transport”. She added that sourcing other service providers will take longer “as the services are required at such short notice”.
She does not explain in her letter why the department opts against continuing with the existing AMS service on a month-to-month basis until the issues around RT-79 can be sorted out.
Mohangi also does not wait for treasury to give the green light before setting things in motion. On the same day as writing to treasury Mohangi also writes to Dr David Motau, Head of the Free State Department of Health requesting to participate in their tender for aeromedical services. Then a week later on 4 July 2016 Motau writes a one paragraph letter to HALO Aviation and Buthelezi HEMS asking if they “are willing and in a position to render the same aero medical service in the Mpumalanga Province at the same terms and conditions as per current contract for the remaining period ending 30/09/2018”. HALO Director Ryan Horsman responds to Motau in a one paragraph letter expressing their “willingness, capability and acceptance to render same service to Mpumalanga Department of Health”.
However, Nombedeso Nkamba, Head of the Mpumalanga Treasury, wrote back to Mohangi on 6 July 2016 clearly stating that the PFMA only allowed for month-to-month contracts in such cases up to a maximum of six months. Her letter leaves no doubt that the proposed three year contract is not in line with the PFMA.
This advice was ignored and Mohangi went ahead with the awarding of a three-year contract to Buthelezi HEMS. In her letter to Thapelo Buthelezi, Director of Buthelezi EMS and HEMS, she states “It is with pleasure to inform you that HALO Aviation (Pty) Ltd & Buthelezi HEMS/Trading at Buthelezi EMS is the successful bidder to supply and deliver the undermentioned item(s) to the Department.” She requests that they assume their services on 11th July 2016. (While Mohangi refers to the “successful bidder”, it should be noted that there was no bid process for the Mpumalanga contract.)
Spotlight asked the Mpumalanga Department of Health why a three year contract was awarded despite the province’s treasury pointing out that such a contract would not be in line with the PFMA. To this the department simply responded as follows: “The department requested to participate on the Free State EMS HALO/Buthelezi JV (Joint Venture) tender hence the contract was for a period of 3 years, which participation was allowed by the Free State Department of Health.”
Treasury and SCA instruction ignored
It has also since emerged that despite the appeal court judgment in November 2017 and an instruction from National Treasury in December 2017, both ordering that RT-79 should be reinstated – meaning AMS should be reinstated as the provider – the Mpumalanga Department of Health has not yet done so. In response to questions from Spotlight the department said: “The department has not yet cancelled the contract with the service provider as there were technicalities that the department is addressing with National Treasury. As soon as these are addressed, the department will look into the matter.”
By contrast, the Limpopo Department of Health gave Buthelezi EMS notice in February that they are cancelling their contract with the company. Unlike Mpumalanga, Limpopo did not provide Buthelezi EMS with a three-year contract, but with a month-to-month contract as prescribed in the PFMA. It is understood that AMS will resume providing an aeromedical service in Limpopo on the 1st of May.
Buthelezi HEMS was also given a contract in the NorthWest – although the NorthWest was not part of the RT-79 tender and its cancelation. NorthWest also opted to piggy-back on the Free State tender. Buthelezi HEMS continues to provide an aeromedical service in North West.
The Free State never opted to be part of the national RT-79 tender and ran its own tender for aeromedical services which was awarded in October 2015. It is this tender awarded to Buthelezi HEMS on which Mpumalanga, Limpopo and NorthWest piggy-backed.
Spotlight did send a series of questions to Mr Buthelezi relating to the above and other issues. Mr Buthelezi failed to answer any of the specific questions, but did send Spotlight an e-mail which has been published in full with a previous article in this series.
Read more in this series:
Note: While Spotlight is published by SECTION27 and the Treatment Action Campaign, its editors have full editorial independence – independence that the editors guard jealously. Spotlight is a member of the South African Press Council.