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Profile - Sherna Saayman
HAWKS HUNT TRUTH BEHIND ‘MYSTERY’ R150-MILLION
FALLING APART: The CDC claimed for work done at Nessie Knight Hospital in Qumbu. This is the dilapidated male ward.
The controversial R150m in fees paid by the Eastern Cape health department to the Coega Development Corporation in September last year has become a subject of investigation by the Hawks.
The amount, which was disputed by health officials, was claimed by Coega as management fees for services rendered.
But officials at the department say the amount was far more than what they were supposed to pay.
Coega acts as an implementing agent for a number of projects for the health department including overseeing the building of hospitals.
The Hawks have confirmed to the Dispatch that they were investigating the payment.
Hawks provincial spokesperson, Anelisa Ngcakani said: “The DPCI [Hawks] is investigating matters which allegedly emanate from the department of health.”
The matter was reported to the Hawks by former health department infrastructure boss, Mlamli Tuswa.
Tuswa questioned the payments but has allegedly been ignored by the department.
The Dispatch has seen a document sent by Tuswa to the Hawks, in which he alleges that the money was paid after a “staged arbitration” process.
“Some of the senior team members from the infrastructure unit objected to this being done. Dr [Thobile] Mbengashe simply ignored all the advice and arguments made to him not to pay,” wrote Tuswa.
On Friday, Tuswa would not speak to the Dispatch, saying only that the matter was “being investigated by law enforcement”.
Coega spokesperson, Dr Ayanda Vilakazi, said they were not aware of any formal investigation by the Hawks.
He said the money claimed from the department was for work done.
He said Coega had made numerous efforts to resolve the dispute with the department, all of which were to no avail.
“Following the arbitration award to which both the ECDoH and the CDC were party, the remaining R150,887,815.64 was awarded to the CDC and subsequently paid by the ECDoH,” he said.
Asked if the money was paid without any work done, as it is alleged, he said: “Nothing could be further from the truth. Work claimed and submitted by the CDC to the department was signed off by the department.
“Curiously, the department paid the third parties but refused to pay CDC the attendant professional fees.”
He said it was important to note the agreement between the CDC and Eastern Cape health department primarily comprised two elements, the planning phase and implementation phase.
“As far as the work claimed by the CDC, some of the projects completed were part of clinics and hospitals, which included but not limited to Cecilia Makiwane Hospital, Frontier Hospital; Nessie Knight Hospital and St Barnabas Hospital.”
He also mentioned other community health centres and clinics they had worked on.
Health spokesperson Sizwe Kupelo confirmed that the matter was being investigated by the Hawks. “You can direct your questions to that office for update report.
“The CDC contract and payments were reviewed by the AG [auditor-general]. The contracts clauses make provision for dispute resolution.
“The arbitrator was selected by a professional independent institution and the allegations are not founded,” said Kupelo.
A source, who is a senior official at the department, said the arbitration process that led to the payment had been organised by Coega.
“Everything was on Coega letterheads. We owed them money, close to R15m and had we agreed they were to be paid.
“But Coega had been at the forefront of this arbitration. There was no independence.
“The department was just following Coega instructions,” said the source.
The Dispatch has seen a letter about the planned arbitration to resolve the dispute between the two entities, signed by Coega CE Pepi Silinga on June 1 2018, addressed to Mbengashe.
In the letter, Silinga says, in order to “save time and costs, no legal representation shall be allowed”.
“It was agreed the decision of the tribunal shall be final and binding on the parties and not to be subject to appeal,” read the letter.
Mbengashe was given five days to respond to the letter.
Two months later in August, the arbitrators ruled in favour of Coega and the department was compelled to pay R180m for fees.
In a letter to former health MEC, Helen Sauls-August, Mbengashe said the officials provisionally accepted the outcome.
He told Sauls-August that Coega’s claim of R182.7m was reduced by the arbitrators by R31.8m to R150m due to inaccurate claims and over-claims.
“For its part, the department is expected to make the R150m payment to Coega in full, by September 12 2018.”
On September 6 2018, the funds were paid to Coega from the department’s equitable share fund and the hospital revitalisation grant. The Dispatch has seen two payment vouchers for R53.5m and R97.4m.
Three weeks later, Mbengashe wrote to the same arbitration tribunal asking for clarity on the payment.
In his letter, seen by the Dispatch, Mbengashe stated that the department had always disputed the values and method of calculation of the fee invoices submitted by Coega “and this was at the core of the dispute which was referred to the arbitrators. For this reason the department seeks clarity on why the amounts were deemed to have been admitted by the department?”
Early in September, UDM leader Bantu Holomisa called for a forensic investigation to be ordered by the minister of health, Dr Zweli Mkhize.
Speaking to the Daily Dispatch this week, Holomisa said there were allegations that the amount was paid to Coega without any invoices submitted to the department.
“This is the money that is suppose to build the hospitals and clinics, it was not budgeted for, where is it from?” asked Holomisa.
“I have all the reasons to believe at the core of this alleged fraud, corruption and money laundering is political patronage at work.”