The PPE bonanza and how ‘flukes’ made people millions

More than 12 000 people have died of Covid-19 in South Africa. Nearly 250 of those were healthcare workers. To protect them and other essential workers who come into contact with people who have the coronavirus, the government has spent R10-billion on procuring personal protective equipment (PPE).

Since then, a network of unqualified, barely qualified and under-capacitated companies have dug into the PPE tender pie. Some of these are allegedly government employees.

The law on who can tender for state work is simple. According to the Public Administration Management Act, a state employee, as defined by the Public Service Act, may not conduct business with the state or be a director of a company doing business with the state. This includes part-time employees, says department of public service and administration spokesperson Kamogelo Mogotsi: “There is no distinction and they [part-time state employees] don’t fall outside the category of ‘employee’.” 

The Mail & Guardian, however, encountered people who said their tenders were acceptable because they were only part-time state employees, with one saying this meant he was “protected by the law”. Mogotsi squashed this idea: “Their interpretation and understanding of it would, therefore, be incorrect.”

PPE in the Eastern Cape 

The Eastern Cape premier’s office released a list of more than 600 contracts, but there were no details as to what each company was meant to procure. This included 10 state employees who were awarded more than R23-million in PPE tenders.  


Chris Lukhope, whose company Amabongwe Building and Civils was awarded a R1.9-million contract by the department of education for hand sanitisers and other gear, said he has never been a state employee. “That seems bad. It is a big mistake.”

Spokesperson for the Eastern Cape treasury, Pumelele Godongwana, told the M&G that it has removed four people from its list of state employees. Lukhope is one of them.

Bandile Mbewu, whose company My Like General was awarded a R7.5-million tender, the largest won by a supposed public servant, said he was no longer a councillor. He resigned as a Democratic Alliance councillor in February 2019  to join the African Transformation Movement. Mbewu told the M&G that he obtained an affidavit to prove this, because he realised he was still listed as a state employee.

Isaac Sabuka’s company, Afrika Rise Investments, also managed to rake in a hefty, R3-million contract. Sabuka said he is not a state employee, but “a deployee”. He is a part-time councillor at the Mbizana local municipality. 

“I have declared my business each and every financial year,” he said. “I am protected by the law that says I am allowed to do business with the state because I am not a full-time employee. I am a part-time councillor. I can do business with the state, but not with the municipality where I am deployed.”

Bathembu Mgudlwa is seemingly in the same boat. He told the M&G that he too works for the state, but in a part-time capacity at Frere hospital in East London. Mgudlwa’s company, Shabar Holdings, received a R1.5-million PPE contract from the provincial department of education.

The role of  ‘coincidence’

A number of tenders have also been red-flagged because they went to companies registered only this year. One company, Lambano Safety Wear and Equipment, was only registered in mid-April.

The M&G spoke to some of the company directors, like Luxolo Makasi, the sole director of Acid Prints. According to the Eastern Cape government’s list, the company was awarded a R259 870 contract by the provincial department of health. The company was registered only in February. But Makasi said he was experienced enough to apply for the tender.  Makasi is the director of three other companies, two of which were also registered earlier this year.

Acid Prints’ contract with the Eastern Cape health department was cancelled because of delays by his suppliers, Makasi said.

Businesswomen Lulama Jakavula said she registered cleaning company Yolo Empire in March. The company is named after one of her children, a decision she made because her first company Khwezi Skills and Training is named after her first-born. 

The R2.9-million contract to provide PPE to 29 schools in the Eastern Cape came as a “coincidence”, Jakavula said. “It just came through. That’s it. At the time of me registering the company, I hadn’t really decided what I was going to do with it … Now boom — this whole thing came.”

Jakavula said tendering after seeing the department’s expression of interest was a “no brainer”. But she conceded that delivering the PPE was difficult at first. “I really didn’t have money to do it. When it started they said we must deliver within 48 hours, I think … And it was quite a lot. I’m actually still doing final purchases with my schools, even as I’m talking to you” she said. 

Godongwana said awarding tenders to newly formed businesses does not automatically represent a fraud alert. “However, all procurement relating to Covid-19 will be reviewed, and further investigated if anomalies are found.”

He added that the provincial treasury is busy investigating all Covid-19-related procurement. “We expect to conclude some of the investigation by the end of August. As in any investigation, it would be prejudicial to give out details.”

Mandilakhe Getye said he didn’t even know his construction and supply company, Ibasathi Projects, was awarded a R1.37-million contract by the department until the list started making the rounds publicly. Getye said since the list’s release he has been trying to contact the department, but to no avail. “I haven’t gotten the order as we speak. I haven’t done anything yet.”

Consequences?

In response to questions from the M&G, the treasury agreed it was concerning that state employees and companies registered in 2020 were awarded PPE tenders by the Eastern Cape government. 

Meanwhile, the Special Investigating Unit (SIU) briefed Parliament’s standing committee on public accounts this week, noting that 658 contracts are currently under the microscope. In its presentation, the SIU said in Gauteng alone it was currently investigating, 90 companies used to procure PPE; 30 companies used to procure medical equipment and 32 companies for services related to catering, flights, accommodation, counselling sessions for staff, among other services. 

Among the details revealed in the current investigations include: some suppliers being paid without delivering supplies or services, price-gouging by suppliers, and officials replacing legitimate and qualified service providers with entities belonging to their families or friends. 

There are currently investigations in all nine provinces, as well as ongoing  probes into national departments, including the departments of labour, education, defence, public works, and correctional services. 

(John McCann/M&G)

Gauteng

One of the biggest PPE tenders dished out by Gauteng was to Dinaane Consulting Services, owned by Rirhandzu Maluleke. According to the province’s procurement list, Maluleke was awarded a R116.9-million tender by the Gauteng health department for surgical masks and hand sanitisers. 

Maluleke did not respond to calls and messages from the M&G.

The PPE scandal in Gauteng has already claimed scalps, with people in the ANC and government placed on suspension as a result of questionable tenders.  

KwaZulu-Natal

In KwaZulu-Natal, a communications company that was paid R6-million by the department of social development for blankets that  were not delivered is listed among those on the Covid-19 procurement list, released last week.

The province spent R22-million on the blankets, paying up to R559 a unit to a group of handpicked contractors, who were paid before the blankets were delivered, according to a forensic audit by the province. The blankets retail for about R250 each.

LNA Communications charged the department R500 a unit for 12 000 blankets. Rosetta Investments was paid R4.9-million for 12 000 blankets; Zain Brothers R4.83-million for another 12 000; and Gibela Investments R6.7-million for an additional 12 000 units.

In addition to the blanket purchases, purchases of hand sanitiser and other equipment by the department totalling R19-million have proved to be fraudulent, and have led to the arrest of a number of social welfare staff, including its acting director general, by the Hawks. 

On Wednesday, the SIU announced that it is investigating a total of 22 Covid-19 contracts entered into by the KwaZulu-Natal social development department, totalling R43.6-million.

The SIU is also probing 57 contracts valued at R514-million by the province’s department of education, which has already suspended four senior managers over alleged corruption in its R50-million programme to provide sanitary pads to learners.

Officials in the provincial treasury have also expressed concern about the potential for corruption in Covid-19 expenditure by the province’s municipalities, which are yet to make public their spending during the pandemic.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
Paddy Harper
Paddy Harper
Storyteller.
M&G Data Desk
The Data Desk is the centre for data journalism at Mail & Guardian

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