How R50 million Covid-19 hospital renovations rose to R500 million

THE Special Investigating Unit (SIU) is gunning for a dozen companies that scored R93 million in payments in the R500m project to renovate a Gauteng hospital leased by the provincial government during the Covid-19 pandemic.

AngloGold Ashanti previously owned the Western Levels Deep Mine Hospital in Carletonville and was leased from Golden Core Trade and Invest by the Gauteng provincial departments of Health and Infrastructure Development.

The departments' plan was to urgently secure additional hospital beds to cope with the number of patients who had become infected with the coronavirus and required urgent medical attention, but the facility was initially earmarked for use as a mental institution.

The estimated cost of refurbishment was R50m with another R10m to refurbish the residential accommodation on the hospital premises.

The two departments estimated the costs of refurbishment to be R50m but ended up spending in excess of R500m and could not provide an explanation of how the estimated expenditure of R50m for the project increased to over R500m.

In its probe, the SIU found that no valid procurement processes in terms of internal policies were followed with respect to the appointment of the dozen companies to undertake the refurbishment of the hospital.

”The appointments of these service providers were furthermore dependant on the finalisation of the agreement for acquisition of the hospital. No tender processes were followed by the provincial departments of Health and Infrastructure Development in the appointment of the professional service providers and contractors,” the SIU found, adding that professional service providers and contractors were telephonically advised of their appointments.

Additionally, many of these service providers were not on the provincial departments of Health and Infrastructure Development's panel of approved service providers and no approvals from the Provincial Treasury were obtained for the expenditure.

The SIU also found evidence of overcharging, disgorgement of profits, and invoicing for amounts that are not market-related by the 12 professional service providers and contractors.

The SIU was also able to quantify the amounts by which the government was overcharged by the companies.

It also established that despite the project's enormous costs, the work was not completed on time, and the provincial Department of Health could not use the hospital during the first three waves of the Covid-19 pandemic, which rendered the need to urgently secure additional hospital beds superfluous and meaningless.

On Tuesday, Judge Soma Naidoo, a member of the Special Tribunal, declared the decisions of the provincial departments of Health and Infrastructure Development to enter into the lease agreement inconsistent with the Constitution, invalid and/or unlawful, and reviewed and set them aside.

”The lease agreements and any extensions and/or addenda thereto, in relation to the premises are reviewed and set aside on the grounds that they are unconstitutional and/or illegal,” the judge stated.

Judge Naidoo also declared the two departments' decisions to appoint the 12 professional service providers and/or contractors to provide services and/or perform works relating to the refurbishment and renovation of the hospital inconsistent with the Constitution and/or unlawful, invalid and set them aside.