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Gauteng government illegally appointed contractors to refurbish Covid-19 hospital, SIU reveals

The AngloGold Ashanti Hospital in Gauteng. Picture: David Makhura/Facebook

The AngloGold Ashanti Hospital in Gauteng. Picture: David Makhura/Facebook

Published Jan 27, 2022

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Johannesburg - The Gauteng Department of Infrastructure Development failed to follow legal procurement in the appointment of six contractors appointed to refurbish the Anglo-Gold Ashanti Hospital on the West Rand.

This was revealed by the Special Investigating Unit (SIU) report handed to President Cyril Ramaphosa this week. The department was stopped from making any payments to the companies.

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The report stated: “From the six contractors selected, only one was identified on the recommended list as indicated on the Bid Evaluation Report of the above-mentioned tender, namely Yikusasa.

“Therefore, it seems unlikely that Mr T Tabane selected these contractors from this appointed panel.”

The SIU’s investigation also found three sets of appointment letters were utilised to appoint the contractors. These were dated and issued on March 25, 2020, April 3, 2020, and June 10, 2020.

The report said: “Only the appointment letters of 10 June 2020 reflect the contract prices of the contractors. Therefore, the contractors were initially selected and appointed without a contract amount, no bill of quantities (’BoQ’) and scope of work.

“The SIU investigation found that before the issue of the third set of appointment letters dated 10 June 2020, namely on 8 June 2020, the first two sets of appointment letters were rejected by Gauteng DoH (Department of Health) as they contained no contract information and presumably this led to the issue of the third set of appointment letters containing a contract price.

“The SIU investigation found that bid documents were issued to the appointed contractors although no tender was issued as it was treated as an ’emergency appointment’. These bid documents were completed by the contractors and were also assisted by the PsPs, who were responsible for the BoQ and contract process.

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“These bid documents were signed by the six contractors on 2, 20, 21 April 2020 and 5 and 25 May 2020, respectively. These six contractors signed their acceptance letters on 10 April 2020, 11 June 2020 and 30 June 2020 respectively. The access certificates were signed by the contractors on 16 April 2020.

“This meant that the contractors had access to the site and started work before they were formally appointed.”

According to the report, this implied that at the time the work started, there was no contract price in place, no purchase orders issued and no BoQs approved.

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The SIU investigation found the access certificates indicated the access date as April 3, 2020, the starting date as April 16, 2020 and the completion date of the project as May 30. 2020. The project duration was indicated as six weeks with the completion date as May 30, 2020, which was later extended to 10 weeks, to June 30, 2020.

On June 14, 2020, a Gauteng provincial government presentation reflected the Angle Gold Ashanti Hospital project was 60% completed.

“This is only four days after the third set of appointment letters were issued on 10 June 2020.”

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The SIU investigation found a lease agreement was entered into between Ashanti, Gauteng Health and the Gauteng Infrastructure Development Department for a period of six months, from April 1, 2020, to September 30, 2020. The first addendum to the lease agreement was concluded on September 30, 2020, for a period of four months, from October 1, 2020, to January 31, 2021.

“The SIU investigation found that during May/June 2020 the costing and pricing for the Ashanti Hospital Refurbishment Project was still incomplete, as discussions/negotiations and reviewing thereof continued.

“During this period the costing was first reflected as R866 170 134, then negotiated down to R647 629 824 and finally to R588 504 235.

“Although the final amount was only finally approved on 18 June 2020, this total amount for the contractors is reflected in the appointment letters issued on 10 June 2020. Thus, eight days before the cost breakdown was approved,” the report stated.

The Gauteng government was ordered not to make further payments to the companies.

[email protected]

Political Bureau

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