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Eastern Cape Health Department cancels air ambulance contract after winning bidder fails to deliver

Eastern Cape Health Department cancels air ambulance contract after winning bidder fails to deliver
Estelle Ellis
By Estelle Ellis
10 Mar 2022
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Several months after an East London company won a multimillion-rand tender to provide an air ambulance service to the Eastern Cape, the contract has been cancelled after the company failed to put a single helicopter in the air.

The Eastern Cape Department of Health cancelled its air ambulance contract on Thursday. 

Leli Investments won the tender in 2020 but after a legal tussle with one of the losing bidders only got the green light to go ahead with the service in July last year. 

The company was headquartered in an exclusive gated residential estate in East London. In papers before court, rival bidders claimed that its director, Sibongile Gobile, had no experience in the aviation industry. Gobile did not respond to a request for comment. 

In 2020, Leli Investments in consortium with Black Eagle Aviation received a multimillion-rand tender to provide air ambulances for 36 months to the Eastern Cape Department of Health.  

A legal saga followed when one of the losing bidders, NAC, challenged the award in court on 7 October 2020 and asked the court to issue an interdict to stop the department from awarding the contract. On 17 November 2020, an interdict was granted halting the implementation of the contract pending a review hearing. 

But this interdict was later lifted in July 2021 as the court ruled that it was unacceptable to have a “stop-gap” contractor render an essential emergency service like air ambulances and that Leli Investments in partnership with Black Eagle Aviation should be allowed to continue rendering the service while the review application was being finalised. 

Lawyers for the consortium had argued that it would suffer irreparable harm if it was not allowed to continue with the service. 

At the time, they claimed in papers before court that the following had been done, according to one judgment in the drawn-out legal saga:  


  • The consortium had purchased specialised equipment and the customised fittings thereof in all three of its helicopters, both those owned and those leased by the consortium;

  • It had paid for the refurbishment and overhaul of equipment required by the contract;

  • It had embarked on the requisite training and orientation of the department’s Control Centre team and the helicopter teams and paid for specialist training;

  • Pilots had been contracted and employed specifically for this service and should the service not be required lengthy employment relations procedures would have to be initiated. Recurrency training had also been conducted for the pilots to ensure competency as per the requirements of the Civil Aviation Authority;

  • Specific aircraft insurance relating to aeromedical operations had been secured and paid for;

  • Purchase agreements had been concluded for two helicopters intended to replace the two leased helicopters;

  • Motor vehicles had been purchased and lease agreements concluded for the accommodation of the pilots at the three operational bases (Mthatha, East London and Gqeberha); and

  • Sundry set-up costs had been incurred at the three operational bases, including for renovating and the purchase of appliances.


Yet, by January, despite assurances by Dr Rolene Wagner, the superintendent-general of the Eastern Cape Department of Health that the service would start on 1 November 2021, the province still had no air ambulances. 

On Thursday, Wagner confirmed that the department had terminated the aeromedical service with the awarded provider “for being in breach of the service level agreement. 

“The department is embarking on a new competitive process for aeromedical services,” she said. “The procurement plan and timelines will be communicated once the recent communication from Treasury regarding the [Constitutional] Court ruling on procurement is considered.”  

The Democratic Alliance’s Jane Cowley said the termination of the contract was a victory for common sense but urged the department to act with speed in the appointment of a new service provider as the Easter holidays, traditionally a peak time for vehicle accidents in the Eastern Cape, were around the corner. 

She said it was unclear how much money, if any, was paid to Leli Investments before the cancellation of the contract. 

“Sadly, this means that Eastern Cape residents will be deprived of an air ambulance service until at least June, which is when the new contract is expected to come into effect. 

“The DA is calling on the health department to urgently ensure that an interim air ambulance service is in place over the Easter holidays, notorious for high numbers of car and bus accidents. 

“Despite the company’s claims in court that they were ready and able to begin operations immediately, this was not the case. It was patently clear then that they never had the requisite capacity or skills to render the aeromedical service. 

“Instead of desperately trying to justify the appointment of Leli Investments, Health MEC Nomakhosazana Meth should have terminated the contract when it was apparent that the company was incapable of fulfilling its mandate. 

“These delays have effectively deprived the residents of the Eastern Cape of live-saving services for an entire year,” she said. 

She added that questions needed to be asked, such as why the Bid Adjudication Committee favoured Leli Investments if it was clearly not functional and what role bias played in the adjudication process. 

“The entire air ambulance contract debacle smacks of contracts for cronies.” DM/MC

 

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