Public Works and Infrastructure Minister Dean Macpherson on July 29 released the findings of an independent forensic investigation undertaken by PwC into the over R800-million Pressure Swing Adsorption (PSA) Oxygen Plant tender, stating that the findings show systemic procurement irregularities, fraud and governance failures within the Independent Development Trust (IDT) – the project management agency which awarded the tender.

The tender was intended to deliver life-saving PSA oxygen plants to 60 hospitals across the country, with a project cost of R836-million, of which R528-million had been allocated directly to the IDT for implementation.

In January, the Department of Public Works and Infrastructure (DPWI) appointed PwC to conduct a full, independent forensic investigation into the tender, with broad terms of reference to investigate whether fraud, corruption, maladministration or regulatory non-compliance had occurred and whether internal controls had failed.

Macpherson mentioned a “disturbing” counter-campaign that was launched during the investigation, with targeted attacks against him.

The report recommended disciplinary action against various IDT executives.

Macpherson informed that he had written to the Hawks, briefed the Health Minister and met with the newly appointed IDT board to initiate consequence management.

Findings in the report include that the eight bidders appointed on the panel for the rollout of the PSA oxygen plants at 60 hospital facilities were not required to provide evidence that they meet the South African Health Products Regulatory Authority (Sahpra) requirements as set out in the Infrastructure Programme Implementation Plan.

Therefore, it appears that the IDT appointed these service providers without confirming that any of the appointed service providers met the required criteria, the report reveals.

The report shows that one of the preferred service providers did not have the required authorisation to use another company's Sahpra licence and the use thereof in the service provider's submission to the IDT appears to be irregular.

"This was a clear misrepresentation. It was fraud,” Macpherson emphasised.

The report’s findings show that the entire procurement process of the roll-out of the PSA oxygen plants appears to be irregular.

The report, however, did not identify any relationship or links between the appointed contractors and IDT or DPWI officials.

The minutes of meetings are vague and contain limited information relating to the items that were discussed during these meetings, the report shows.

Moreover, it indicates that the submission documents that were presented further often contain incorrect and incomplete information such as the correct dates of meetings.

Record keeping of these minutes are poor and none of the recordings for any of these meetings could be obtained, the report reveals.

“These findings represent a monumental failure in governance and adherence to IDT policies and the National Treasury regulations – undermining the integrity of public procurement and threatening donor funds," said Macpherson.

The investigators found that the bid evaluation process was deeply flawed, he pointed out.

The Sahpra compliance requirement – originally stipulated in the Project Execution Plan and the Department of Health’s memorandum of agreement – was deliberately removed from the final request for proposals, Macpherson informed.

Committee appointments were not properly constituted, bid scores were not properly documented and price negotiations were not transparent, he outlined.

Also, one of the preferred service provider's CIDB grading limited it to contracts of no more than R200-million; however, the IDT awarded it contracts worth R428-million, which is more than double its allowable threshold.