Firms hired to refurbish AngloGold hospital lose bid to set aside SIU preservation order

The Special Tribunal on Friday dismissed a reconsideration application by companies that allegedly illegally pocketed R588 million meant to refurbish the AngloGold Ashanti Hospital in Carletonville, in the West Rand.

Preservation order

Pro Serve Consulting and Thenga Holdings had applied to the tribunal for a reconsideration of an interim preservation order the Special Investigating  Unit (SIU) obtained on 17 September 2021.

The tribunal granted an order freezing amounts of R1.7 million and R6.2 million, respectively, held by First National Bank from accounts belonging to both companies pending the determination of the SIU’s review application.

ALSO READ: SIU freezes R8 million held by firms hired to refurbish AngloGold hospital

Pro Serve and Thenga argued that the preservation order was wrongly granted as the SIU did not make out a proper case for it. The SIU, on the other hand, insisted that the preservation order was appropriately granted. 

Judge Lebogang Modiba of the Special Tribunal, on Friday, ruled in favour of the SIU and dismissed the companies’ application.

In her 31-page judgment, judge Modiba ordered Thenga to pay the SIU’s costs of filing a replying affidavit to its answering affidavit on the attorney and client scale. 

This was due to the company filing its answering affidavit late and not offering any explanation for the delay, which was prejudicial to the SIU.

“The remaining costs of the reconsideration application shall stand over for determination in the review application,” Modiba ordered.

AngloGold Ashanti hospital refurbishments

The SIU obtained the interim preservation order after it alleged that the appointment of Pro Serve and Thenga by the Gauteng Department of Infrastructure Development (GDID) was irregular and unlawful as it was not in compliance with Treasury’s procurement provisions.

It was also alleged that the department did not follow an open and transparent tender process, and there was no approved budget for the hospital project.

Pro Serve was appointed to render professional architect, electrical, mechanical, civil, and structural engineering, while Thenga provided mechanical and general construction work for the project.

According to the SIU, Pro Serve and Thenga are alleged to have overcharged the GDID. Initially, the budget was estimated at R50 million to refurbish the hospital.

However, the costs escalated ten times higher, with no explanation in place, to R588 million.

Wasteful expenditure

It has been alleged that the project resulted in wasteful expenditure because the hospital was not available for use during the first two waves of the Covid-19 pandemic.

At least 200 to 250 beds – set aside for Covid-19 patients – were expected to be included in the refurbishment, and new equipment had to be installed in the hospital’s radiology unit.

However, major delays and the ballooning of costs to over R500 million resulted in the hospital being unavailable for at least two waves of the pandemic.

The hospital only re-opened after 15 months, with only a handful of patients and staff.

NOW READ: ‘No explanation’ for how R50m hospital tender ballooned to R588m – SIU