Litigation issues delayed cancellation of botched air ambulance contract - Eastern Cape MEC

The successful bidder in a crucial air ambulance tender was given months to correct failures to abide by the contract, including being unable to put a single helicopter in the air at a time when no emergency medical choppers were available in the province’s public health sector.

The explanation for delays in cancelling the contract, according to the province’s health MEC, Nomakhosazana Meth, was that they were trying to avoid more litigation.

The Eastern Cape is a vast and mostly rural province with specialist hospitals located only in the three major metros. It was previously served by three air ambulances based in Mthatha, Nelson Mandela Bay and East London. This chopper was capable of reaching more remote areas.

In the days from the beginning of December to mid-January – a busy time on the province’s roads as people returned from holiday – 210 people died in traffic accidents. Meth denied that the fatalities could be blamed on the lack of air ambulances, saying that the province’s emergency services were still able to respond by road.

New delays mean that the province will also likely be without air ambulances for the Easter holidays – as it was last year.

Meth filed a report with the Eastern Cape legislature explaining why it has taken so long to cancel the air ambulance contract awarded to Leli Investments, an East London-based company with its headquarters in a luxury gated estate in the metro. 

In papers before court, rival bidders, who asked the department to review Leli’s contract back in 2020, claimed that its director, Sibongile Gobile, had no experience in the aviation industry.

Litigation delayed the implementation of the service until mid-2021.

Meth explained that the joint venture between Leli Investments and Black Eagle was terminated in August 2021, but Leli Investments indicated that it would provide air ambulance services to the health department. Meth said the department indicated that Leli could continue to do so.

“There was an undertaking by Leli Investments that the service would commence on 1 November 2021, but nothing happened.”

She said a legal demand was sent to Leli to remedy this breach of contract. 

Despite not being able to provide any air ambulances to the department, Leli Investments indicated that it would oppose the cancellation of the contract.

“There were various discussions between Leli and the department to ensure that any reasons cited by Leli Investments were not valid concerns that prevented the provision of the service,” Meth said.

The department then received an undertaking that the air ambulance service would be up and running by 15 December 2021.

“However, Leli Investments did not commence the service on 15 December 2021, in the main, because the department had not yet signed the settlement agreement with NAC [National Airways Corporation], where NAC had withdrawn from their claim to review the original award to the joint venture,” Meth said. Aircraft services specialist NAC was one of the losing bidders for the tender.

Meth said the department first had to take legal advice, and then tabled the decision to cancel Leli’s contract on 31 December 2021. 

“Leli Investments then responded with an appeal to the office of the MEC. Legal counsel was once more sought, to ensure that all issues being raised had been considered fairly and any decisions and steps taken by the department could withstand legal muster,” she said. 

“On 17 February 2022, senior counsel has advised the department that the contentions advanced by Leli Investments remain without merit. Given that Leli Investments was deemed entitled to assume the obligations of the Joint Venture in terms of the Service Level Agreement when the Joint Venture was terminated, Leli Investments was then required to meet its obligations without further delay. 

“The terms of the Service Level Agreement do not allow the service provider to suspend its obligations because the Department had not yet concluded the settlement agreement process, following the withdrawal of the review request by NAC,” Meth added.

“The concern of the Department has always been that the Emergency Medical Service capability be augmented by an aeromedical service. 

“Given the time taken to issue and award a new bid, and that the festive season was upon us, the Department tried to ensure that the awarded contractor provided the service by the time of the festive season, as they had agreed to, and as they were legally obligated to. 

“When the contractor failed to honour its contractual obligations, alternative service providers were approached to provide interim relief, whilst the correct processes were being followed to resolve the failure of Leli Investments to re-commence the aeromedical service. 

“These efforts were unfortunately not successful as the service providers were not able or willing to provide an interim service,” Meth said.

“The Department regrets that the aeromedical service is not provided at this time, despite the award having been made to a successful bidder,” Meth said, adding that although it was “time-consuming”, it was necessary to make sure that the department was within its rights to cancel the agreement.

“On the one hand, the Department wants to ensure that the needs of the people of this province are met in the shortest available time and, on the other, it is as important to ensure that due processes are followed diligently and fairly, cognisant that one operates in a highly litigious environment,” Meth added.

On an optimistic timeline, it appears from Meth’s report that the province might only get an air ambulance service by June.

“A new tender will be issued to the market once the final termination of the contract to Leli Investments is completed,” Meth said. 

The Democratic Alliance’s Jane Cowley said she would write to the MEC to request that the tender advertisement for the aeromedical service is prioritised and made available to the public with immediate effect. 

“I will also request that she puts measures in place to safeguard the integrity of the bid adjudication and bid evaluation processes to ensure that they do not fall foul of scrutiny,” Cowley added. DM/MC