Covid-19: Makhura said there are disciplinary and criminal investigations into the procurement of PPE

Gauteng Premier David Makhura gave his weekly update on the Gauteng Command Council on 30 July.

Makhura said that the concerns about the procurement processes for the supply of personal protective equipment (PPE) have greatly embarrassed the Gauteng provincial government. Gauteng Health MEC Bandile Masuku and his wife, City of Joburg MMC for Corporate and Shared Services Loyiso Masuku are on temporary leave for the next two to four weeks. This follows reports that Masuku, alongside other government officials, were allegedly involved in irregular tender processes relating to the procurement of personal PPE in the Gauteng Department of Health.

Makhura said that when he became premier in 2014, clean governance was a priority for his administration. “In six years, yes we have incidents of corruption in this or that department but we haven’t had something on the grand scale of the allegations we are facing with PPE now, because the open tender system that we have was an active measure to ensure that anyone who gets a tender has to appear in a platform where others can watch.

“In the past five years, we haven’t had many cases where tender decisions are challenged by one company over another.”

He said that in March, there were several circulars issued by National Treasury on the emergency procurement to guide provinces and municipalities. “I know for a fact that emergency procurement can always be used and abused as a reason to be corrupt and award those tenders to those that don’t qualify.”

He said that the open tender system would not have applied under the emergency procurement scenario. He explained that the procurement of PPE was centralised with the Department of Health. He added that while there was a good reason for these emergency processes, they could be abused.

Masuku explained that the centralisation was to ensure that Departments of Health in all provinces could procure PPE for all departments and to ensure that it was of an appropriate standard. “It was also to make sure that there wasn’t overcharging. This is a department that deals with PPE all the time outside the pandemic so that was to ensure there was a proper approach and ensure we get value for money.”

He added, “That also became an opportunity for abuse.

“These allegations we are facing now have profoundly eroded confidence in the government…but these allegations have also profoundly undermined the tremendous work done by various sectors in the fight against Covid-19.”

How did it happen?

Makhura explained that Gauteng Audit Services has been working with the Department of Health to monitor all procurement.

“The Gauteng Audit Services had been given a mandate, at the request of the MEC [Dr Bandile Masuku] and the HOD [Prof Mkhululi Lukhele].”

In April, Lukhele sent this letter of request to the treasury. “At that point that the request was made, it was clear that we would be going into huge amounts of procurement with a huge amount of money. The audit services did an audit and out of that came back to the Department of Health and myself to say that they have identified areas with a lack of compliance in the procurement of PPE.”

He said that the Gauteng Audit Services said that they believed the most appropriate way to act is to appoint a forensic investigation with the Special Investigation Unit (SIU).

“The audit services came back to me and the MEC for Health in May and the MEC and myself agreed that we must do what the Gauteng Audit Services is requesting. At that time, they had looked at only a few procurement areas.”

From 25 May, the Special Investigation Unit was given the mandate to do a forensic investigation.

He said that one of the important things to identify is that, among other things identified by the audit services, purchase orders were being issued to various companies.

He said that purchase order amounts being shown in the media do not necessarily represent the money paid to those companies. “The audit services said that they were concerned about how that work was being conducted.

“I want to make it clear that if an official is found to have been involved in corruption, whether they have resigned or not is not the issue – they must be found. At the time I was not making a conclusive statement. If anyone resigns while the Special Investigative Unit is doing their work, they will be found.”

He said that initially there were 91 companies being looked at, which had been given purchase orders to deliver PPE. “Some of them have delivered PPE, for some of them the quality of the PPE might be an issue, some of those companies where also not paid on the basis of failure to deliver or the quality of PPE.

“Our Gauteng Treasury went further to say to the Department of Health that you should not pay now that you are doing this investigation. At this point, there was up to R1 billion of PPE that had been ordered.”

He said that subsequently, many of those contracts were cancelled or are still being cancelled. “The full list of companies being looked at now is 102 companies. We are not suggesting that all of these are not proper business. We are not suggesting that they were all appointed inappropriately or did not deliver proper PPE but they must all be looked at.

“There are disciplinary processes on some of these departmental investigations, there are also criminal cases being pursued in some of those investigations.”

‘Good work done by the Department of Health’

“These allegations have damaged the work done by the MEC for Health. He has been leading the team very well. I am disappointed to have an MEC who has been leading the front very well facing allegations that I can’t ignore,” he said.

“As the premier of Gauteng, I am giving MEC Masuku a leave of absence. Initially for the next four weeks. We are hoping the investigations will be completed in this period.”

Makhura added, “The real, full story will come out in the forensic investigation. This story has the potential to sidetrack from the battle to save lives and it is shameful to have money meant to be used to save lives, being open for general looting.

“I want to emphasise that I issued a memo to all departments, firstly saying that the procurement of PPE is very important and we must ensure we support local manufacturing… and proper businesses must be supported.

“These significant allegations undermine everything we have been doing… Every single cent that gets allocated for Covid-19 must be safeguarded.”

Interim MEC appointed

Makhura said that the MEC of Transport Jacob Mamabolo will be the acting MEC for Health. “He will do his work with transport and in the next four weeks, while we are doing this investigation, he will be the acting MEC.”

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