IDT contractor embroiled in Health DG bribe allegations won highly suspect tender, new evidence shows

A trove of documents obtained by amaBhungane show how the Independent Development Trust (IDT) appointed a contractor embroiled in bribery allegations involving director-general of the Department of Health Dr Sandile Buthelezi, despite obvious warning signs in the procurement process.

In 2023, the IDT issued a request for quotation (RFQ) for the refurbishment of Tambo Memorial Hospital in Boksburg, Johannesburg, following a gas tanker explosion in 2022, but the awarding of this project to construction firm Base Major was mired in red flags.

Chief among these were:

• According to the IDT, only three bids were responsive, but they ranged from R20-million to R2.5-billion, making the comparison meaningless;


• The shortlisting of a company with links to notorious corruption-accused tenderpreneur Edwin Sodi; and


• The winning contractor Base Major’s approved bid of R566-million was more than double the R270-million initially budgeted by the Department of Health.

This was the same contract at the centre of graft allegations against Buthelezi, who is the subject of a Hawks investigation into claims that he solicited a R500,000 bribe from Base Major in July 2023. That docket has been with the National Prosecuting Authority (NPA) for the past seven months.

Late last year, amid these concerns, the department paid Base Major over R21-million in initial payments through the IDT, which handled the procurement and contract management on behalf of the National Department of Health (NDOH).

The IDT is a government infrastructure implementing agent under the Department of Public Works and Infrastructure handling procurement, project management, construction work and handover for government departments for a fee.

The bridge where wreaths were laid along Hospital Street in Boksburg, near the scene of the December 2022 tanker explosion next to the Tambo Memorial Hospital. (Photo: Gallo Images / Fani Mahuntsi)

According to his spokesperson James de Villiers, Minister of Public Works and Infrastructure Dean McPherson expressed concern over governance at the IDT after the entity’s failure to submit its 2023/24 financial statements.

These new revelations will add to concerns regarding the IDT, including those flowing from another health department tender for oxygen plants that was previously reported on by amaBhungane and Daily Maverick.

Siphoning the money?

News24 previously reported that the Hawks are investigating allegations that Buthelezi leveraged his network in the NDOH and the IDT to solicit the R500,000 bribe from a consultant working for Base Major in July 2023.

Buthelezi allegedly provided the banking details of a company based in Durban to colleagues in the department, along with the instruction to direct the Base Major consultant to transfer the money into that account.

When the money was transferred it was allegedly funneled through another company before either an alleged associate of Buthelezi or a proxy collected the money in cash and delivered it.

The claim is that Buthelezi, in return, allegedly interfered in the procurement process for the renovation of Tambo Memorial Hospital and ensured Base Major won the contract.

By then the contract had ballooned in price due to the late inclusion of solar and fire compliancy in the renovations, as well as new assessments undertaken during the bidding process.

Denials

IDT CEO Tebogo Malaka signed the appointment letter for Base Major despite the obvious discrepancies and red flags.

IDT spokesperson Phasha Makgolane said Malaka was not aware of the bribery allegations against Buthelezi at the time and was “never put under any sort of pressure to sign the appointment letter for the said contractor”.

While the Hawks did not wish to comment on the status of their investigation, NPA spokesperson Lumka Mahanjana said numerous meetings had been held with the investigating officer and the whistle-blower.

“There are no delays in respect of the investigation, there is regular interaction between the prosecutor and the investigating officer. Dr Buthelezi has not been engaged,” Mahanjana added.

Department of Health spokesperson Foster Mohale referred most questions to the IDT, but said that “the Department will cooperate with the law enforcement agencies, as and when approached to enable them to execute their mandate”.

“The Department urges anyone with evidence of bribery or unethical behaviour by officials to present it [to] the law enforcement agencies to investigate accordingly,” Mohale said.

Buthelezi did not offer any comment independently of the department’s statement.

Base Major also referred most of amaBhungane’s questions to the IDT, but denied that it had ever paid a bribe to secure the contract, saying there had been no communication with either Malaka or Buthelezi before the awarding of the contract.

“Base Major does not pay bribes in order to secure work, or for any other reason. Base Major was awarded the Tender based on the content of its bid, which was superior to that of any other bidder.”

It added that no one in the company had been contacted by the Hawks to provide information on their investigation.

President’s eye

The matter has caught the attention of President Cyril Ramaphosa, who is looking into the bribery allegations against Buthelezi, according to spokesperson Vincent Magwenya.

In a terse response to amaBhungane’s questions on whether Ramaphosa has met with officials to discuss the allegations against the DG and whether he plans to suspend Buthelezi, Mangwenya said that “the matter that you reference is being looked into. That’s all I can say for now”.

According to the Public Service Act (PSA), only the President has the authority to appoint or remove a director-general or the head of a national department, leaving Buthelezi’s fate squarely in Ramaphosa’s hands.

A procurement mess 

Tender documents show how Base Major scored the contract despite red flags in the procurement process.

According to the submission to the IDT’s executive bid adjudication committee, three companies were shortlisted for the project.

However, on closer inspection of the price quoted by each company – Base Major, Qinisa Construction and G5 Group – two of them should have already been disqualified by this point.

Base Major quoted R566,981,646, while Qinisa Construction quoted an astronomically high R2,548,211,718. G5 Group – a company with links to ANC benefactor Edwin Sodi – was recorded as having quoted R19,129,437, although this was not in fact the case.

The R19-million quote belonged to Zafricon Construction, not G5 Group, yet somehow, G5’s name was linked to the bid.

Angelique Moodley – who labelled herself as G5’s director, but in fact resigned in 2021 – left the offer letter blank, yet signed off on it.

Angelique Moodley’s signature on G5’s offer letter.

Zafricon Construction quoted R19,129,439 – R2 more than the G5 Group was said to have quoted.

Zafricon‘s offer letter.

Interestingly, IDT spokesperson Phasha Makgolane claimed that G5 Group was eliminated from the process after failing to complete the form of offer letter.

However, documents clearly show that G5 Group pulled out of the process entirely at the last stage. Once that happened, the obvious choice based on price would have been Base Major.

EBAC submission showing G5 withdrew their bid and were not eliminated.

“The amount submitted by G5 Group was not captured as the ‘Form of Offer’ was NOT completed as required, which meant they were outright eliminated,” Makgolane said.

“As indicated before, the contractor that pulled out was Zafricon Construction and NOT G5 Group. They [Zafricon] have acknowledged the error in the bid, and given the magnitude of the error, they believed that they could not successfully complete the contract as required.”

Collins Mothabela, director of Zafricon, told amaBhungane that his company mistakenly quoted R19-million for the job based on an incorrect assessment of the works, adding that he was unaware that G5 Group had quoted the same.

Moodley said she could not answer questions around G5 Group’s bid because she was not involved in the tender office of the company. She undertook to confirm whether it was her signature on the offer letter but never did, nor did she respond to amaBhungane’s request for comment.

Moodley eventually asked amaBhungane to “stop messaging me,” adding “I don’t work for G5”.

G5 Group – formerly known as NJR Projects – has been linked to Sodi.

While he is no longer a director, he has been repeatedly linked to the company through failed tenders and financial scandals.

The commission of inquiry into State Capture found that Sodi had made payments referencing high-ranking ANC politicians, including Deputy President Paul Mashatile, former minister Thulas Nxesi and former minister of health Zweli Mkhize. The latter claimed that this was during his tenure as treasurer-general and that Sodi’s payment was made into an ANC account.

Attempts to contact G5 Group were unsuccessful, as were calls and emails to contact details linked to Sodi and his company, Blackhead Consulting.

Tambo Memorial Hospital was damaged after the Boksburg blast of 2022 when a gas tanker exploded near the hospital. (Photo: Supplied)

Bizarre R2.5bn bid

Adding to the red flags, Qinisa Construction’s bid of R2.5-billion – nearly five times higher than Base Major’s – was somehow deemed acceptable for shortlisting.

Director of Qinisa Mbuso Mthembu told amaBhungane that his company based their assessment on a “total redesign” of the hospital and not just its renovation. However, this would have failed to comply with the specified scope of the project.

Despite this, Makgolane said the company had met all mandatory requirements and that their bid “covered fully conditional assessment of the hospital with quite high rates”.

Makgolane added, “the project is implemented as a turnkey development, which required potential bidders to conduct a full condition assessment of the hospital, from the basic scope of work provided. Some bidders did detailed assessments while others did not do so as required by the bid, hence the project budget variance of the bidders”.

Ballooning cost

On the ballooning of the contract, Makgolane said the original price of R270-million was a “rough estimate” with no technical scope assessment.

“Consequently, the scope was only fully evaluated and costed during the bidding process. The approved amount of R566 million, though higher than the initial estimate, is deemed reasonable based on the detailed information provided by the contractor and subsequently approved by both the IDT and NDoH.”

That statement appears to be contradicted by a budget confirmation letter dated 27 February 2023 and addressed to the DG of Health, which noted that “the IDT has concluded the Infrastructure Programme Implementation Plan (IPIP) and covers the proposed project execution, deliverables, detailed cost estimates and programme of implementation”.

Screenshot of budget confirmation letter.

Later, the IDT was asked to include solar panels, batteries and fire compliance “to all projects,” which supposedly added R150-million to the original R270-million assessment.

Screenshot of EBAC submission and inclusion of extra works.

Payments still going ahead

Meanwhile, Base Major has been paid around R21-million since its appointment.

According to payment information obtained by amaBhungane:

• The NDOH transferred R13,000,000 to the IDT on 17 September 2024.


• The next day, on 18 September, the IDT paid Base Major R12,276,588, seemingly for work completed.


• Then, on 17 October 2024, the NDOH again transferred R9,644,909 to the same project account with the IDT.


• That same day, the IDT paid Base Major that full amount.

These payments, totalling R21,921,497, include bills for a performance bond, insurance and site establishment.

Makgolane told amaBhungane that the payments to Base Major were done as per contractual agreement. DM

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