About your stimulus, Mr President
Dear President Ramaphosa
We apologise upfront for sending you another letter. We know you have been receiving a lot of mail lately…some writers asking you to fix the dire and tragic state of our school sanitation, while others asked you to think carefully about how to save the health system.
We listened carefully to your stimulus package announcement last week and we welcome the details stating that you will among others be filling over 2 000 critical vacancies in the health system and buy hospital beds and linen. This is good news. It is not a secret that the health system needs drugs and other complex supplies, but also linen and beds.
However, we have a couple of red lights, issues we believe important to urgently bring to your attention. You may ask why you need to read even more bad news, news you probably know. Well, we believe that amid this “bad news” that we are sharing with you there are opportunities to cut off the dodgy connections enabling the looting in some provinces, to recover some much-needed money and to ensure our money ends up in the right hands and serving our people.
While our media counterparts have rightly and fortunately been spending much time on reporting on state capture, the Gupta leaks and the looting of our State Owned Enterprises, Spotlight (a Treatment Action Campaign and SECTION27 publication) has been doing a series of investigations under the banner #Health4Sale. We think it is important that we bring to your attention what we unearthed because we believe by acting now, you could quite quickly find some much-needed Rands to redirect while at the same time ensuring only quality beds and equipment is purchased for our hospitals.
One of Spotlight’s main focuses has been the gangster provinces, we don’t use this term lightly, of the Free State and NorthWest where our investigations reveal that money is being looted and siphoned off without the actual services or supplies reaching the health system.
A Gauteng-based ambulance operator, Buthelezi EMS, that is currently the subject of both Hawks and Treasury investigations has scored both road and air ambulance contracts in the so-called Premier league provinces amounting to over a Billion Rand since 2013. Concerningly, we understand that the company is a frontrunner to secure a lucrative new three year tender in the Free State. Even after being exposed earlier this year, and after strong words from the Minister of Health, Buthelezi EMS is at this moment still doing business with the state in at least four provinces. Mister President, the looting continues as we speak.
So even while billions is being paid, well-placed sources allege that Buthelezi EMS often transports multiple patients in a single ambulance as part of their inter-facility transfer service. Sometimes as many as five patients will be transported in one ambulance, but Buthelezi would allegedly then bill as if five different ambulances were used and write invoices with five different reference numbers. At other times, patients who could safely be transported in cars are allegedly transported at great cost in ambulances.
It is also alleged that Buthelezi often charges for distances that are longer than the actual distances travelled. We have seen devastating figures to this effect that have been presented in a provincial department of health management meeting. Spotlight was told of a case where a 2km trip was charged for as a 100km transfer.
So, Mr President you may be asking how Mr Thapelo Buthelezi’s companies (he has registered more than six versions and names) managed to score these lucrative tenders and cushy, backdated increases? There are clearly many enablers when the signatures were inked including we believe possibly some folk at Treasury and the SA Revenue Service – one dot worth joining is look no further than down the passage in Luthuli House where Comrade Secretary General former Free State Premier Ace Magashule may be able to shed some light.
Spotlight found that Buthelezi EMS netted more than R15-million from two suspect back-dated price increases from the Free State Department of Health, apparently without much scrutiny. Documents that Spotlight has had sight of reveal how the increases were signed off during a five-day period, when it seems the Free State Department of Health was temporarily taken out of administration by decree of then Premier Magashule.
In a signed memorandum dated 3 February 2017 seen by Spotlight, Magashule effectively takes the provincial department of health out of administration for five days by appointing the head of the department of health, Dr David Motau, as acting accounting officer from 6 February 2017 to 10 February 2017. In this five -day window, Motau signs off on what procurement experts describe as two highly unusual back-dated 8.5% price increases for Buthelezi EMS. One cannot help but ask how many hospital beds this money would have brought in a province where we know patients often sleep on hospital floors.
Spotlight sent a photographer to Buthelezi’s Bloemfontein ambulance base. The base does not have any external signage. The outside of the suburban house in Bloemfontein was in a shocking state with rubbish, mud and a yard full of ambulances, some seemingly no longer in running order. Aerial photographs show a backyard littered with rubbish and no sign of any waste disposal.
Spotlight asked the Free State Department of Health whether they visited and inspected Buthelezi’s ambulance bases, one would imagine that if you pay someone hundreds of millions you would want to do some checks? No, said head of department Dr David Motau: “Sites visits was not a requirement as per the tender document”. See Ambulance Bases of Shame.
How do we ensure that stimulus money, or any government money money for that matter, are not wasted on shoddy businesses like this that don’t only waste money, but degrades the level of healthcare services delivered to the people? How do we insulate public procurement from this kind of looting?
President Ramaphosa, now zooming in on those new hospital beds you want to buy. Spotlight recently reported on a story, again in that gangster province the Free State, which involves hospital beds and other important equipment.
Doctors in the Free State have told us that newly purchased theatre beds are breaking in hospitals within months of installation, making it hard to perform critical surgery.
President Ramaphosa, at one hospital, a height-adjustable orthopaedic theatre bed got stuck on a too high setting, forcing doctors to stand on benches while operating. In other cases, newly installed theatre lights are too low, resulting in some of the theatre personnel often knocking their heads while performing surgery.
Doctors also report that a number of newly purchased anaesthesia machines are gathering dust because anaesthetists are not willing to use the machines since they are missing components and various alarms do not work. Anaesthesia machines typically have multiple components and a sophisticated set of alarms to ensure that nothing goes wrong while someone is under general anaesthetic. This is equipment and beds worth millions.
The tender in question was awarded in August 2016 to a company called Mediquip SA Hub. According to the Free State Department of Health, they have paid Mediquip just over R100-million under this tender in the less than two years that the tender has been running. Mediquip appears to be a relatively small company, employing only 10 people, however they have a running contract to supply all kinds of equipment to all hospitals in the Free State. Mediquip have no online presence although their lawyer claimed that a “new website is under construction and will be operational in due course”. (This was in May, they still have no online presence). The Free State health department also indicated that they have no plans to cancel the tender.
But wait Mr President, there is more. The two key local directors of Mediquip are two people you may have come across in your political life, George Sebulela and Bernard Tefetso Phitsane.
Sebulela is the President and Chief Executive of Sebvest Holdings, Secretary General of the Black Business Council and a current member of the Eskom Board. Yes, Eskom which we know needs leaders beyond reproach. Spotlight sent Sebulela a list of questions. He acknowledged receipt and said he would ensure that Mediquip staff respond. That was the last we heard.
We did however, receive answers to questions sent to Phitsane via a lawyer’s letter. Phitsane is a man whose name delivers many Google hits. He is a senior ANC politician in the Free State and currently the Chairperson of the beleaguered Bloem Water and is a close ally of Ace Magashule. Phitsane is also listed as a director of Dinaka Trading 5 CC, a company of which Ace Magashule is a former director and his son Tshepiso Magashule is still listed as a director. Speaking through his lawyers, Phitsane denied to Spotlight ever having been in business with Ace Magashule, in apparent contradiction of CIPC records. According to information revealed in the #Guptaleaks articles published by Amabhungane Tshepiso Magashule (Phitsane’s co-director of Dinaka Trading 5 CC) has been linked to various deals with the Gupta family for whom he worked.
Phitsane also happens to be married to Nelisiwe Phitsane who is the Chief Director Supply Chain Management and Asset Management in the Free State Department of Health. According to Mr Phitsane this relationship was disclosed when bids were submitted to the Free State Department of Health. The department confirmed this to Spotlight, but failed to provide proof when requested.
But it doesn’t end there, Mr President. In April 2016, a few months before being awarded the medical equipment tender, the Free State tender bulletin announced Mediquip was awarded their first major tender in the province. This tender was for the provision of mobile medical units (a kind of mobile clinic), or “China buses” as they are commonly referred to in the province. The Department indicates that they have paid Mediquip a total of just over R70 million under this tender for six of these mobile medical units (Thus adding up to close to R12 million per unit).
However, while the announcement was made in April 2016, this tender was in fact already awarded in October 2015. In all other cases where Spotlight looked at the award of tenders, the award was announced the next month and not six months later. The Free State Department of Health failed to respond to a question on why the announcement was delayed.
The October 2015 date is also only half-a-year after Phitsane and Sebulela became directors of Mediquip.
Meanwhile, OFM News reported last week that these R70-million mobile units are parked at the Free State Psychiatric Complex in Bloemfontein where they are gathering dust. It is reported that these buses cannot travel on rural roads. Instead some of the mobile “clinics” are rolled out at political jamborees – we know Mr Magashule loved these when he was Premier.
As you will know mister President, this is the tip of the iceberg. We have not even touched on the Gupta-linked Mediosa, or any of the other tip-offs that have been flooding in since we started publishing the #Health4Sale articles. We have also not zoomed in on how Buthelezi managed to get air ambulance contracts in Mpumalanga and Limpopo and how national treasury got caught up in, and eventually lost badly, in lengthy court cases concerning these dodgy contracts. We can also disclose to you that four provinces have recently advertised new tenders for air ambulance services and that Thapelo Buthelezi has attended all pre-bid briefings indicating that he fully intends to again get a slice of the pie.
So, Mr President, what are the solutions? We agree there are no easy fixes to the endemic corruption in many of our provinces. Insulating procurement from political influence is both urgent and something that cannot be achieved overnight. A good start however, and something that can happen right now, is to ensure that the Buthelezis and the Mediquips of the world are properly investigated – something which unfortunately cannot be left to the Free State or North West Hawks. These companies are still receiving millions of our Rands and are no doubt hoping for some of the new stimulus money. By acting decisively against these companies you may save quite a bit of money and at the same time flush out some crooks. In fact you may buy those hospital beds and linen at much better prices and still have some change. As your one Minister reminded us so famously during the height of State Capture. Join the dots.
Yours in the spirit of Thuma Mina.
Anso Thom and Marcus Low