Health Minister Aaron Motsoaledi welcomes forensic report on R836m PSA oxygen plant tender irregularities. The report, released by Public Works and Infrastructure Minister Dean Macpherson, uncovers procurement flaws, fraud, and governance lapses at the Independent Development Trust, prompting calls for disciplinary action against top officials and a push to hold wrongdoers accountable for denying South Africans vital oxygen supplies during the COVID-19 crisis.
Background to the Controversial Tender
The R836 million tender aimed to install Pressure Swing Adsorption (PSA) oxygen plants at 55 public health facilities across South Africa. These plants were designed to provide a steady oxygen supply, a critical need highlighted during the COVID-19 pandemic when hospitals faced shortages. Of the total amount, R528 million came from donor funds via the Global Fund and was handed to the Independent Development Trust (IDT), a state entity under the Department of Public Works and Infrastructure (DPWI), to manage the project.
The tender process began amid urgent demands for better healthcare infrastructure. However, concerns arose in October 2024 when media reports exposed potential issues. It emerged that the IDT had awarded contracts to companies despite red flags. Specifically, two of the three awarded firms lacked registration with the South African Health Products Regulatory Authority (SAHPRA), a key requirement for handling medical equipment. One company was even accused of submitting fake documents, raising fears of it being a ghost entity that secured R428 million worth of work without proper credentials.
The original budget from the Department of Health stood at R216 million. Yet, when the IDT put out the request for quotation (RFQ), the costs soared to over R590 million. This jump happened without clear records of approval or checks to ensure value for money, pointing to poor oversight and possible manipulation.
Launch and Scope of the Forensic Investigation
Public Works and Infrastructure Minister Dean Macpherson launched an independent probe in December 2024 after receiving incomplete responses from the IDT board on the tender’s handling. He appointed PricewaterhouseCoopers (PwC) in January 2025 to dig into the matter, as the IDT could not investigate itself fairly. The probe, which wrapped up after reviewing over 90 procurement documents, financial records, and conducting more than 40 interviews, also checked verifications from bodies like SAHPRA.
The investigation faced hurdles, including delays from IDT officials who held back documents and demanded extra approvals. Despite this, PwC completed the work, and Macpherson released the findings on 29 July 2025 during a press briefing in Cape Town. He stressed his drive to root out corruption and rebuild trust in public entities, noting that the IDT had a history of problems like unfinished projects, tender flaws, and repeated audit failures.
Key Findings: Irregularities, Fraud, and Governance Failures
The PwC report laid bare a string of issues in how the IDT ran the tender. It found glaring red flags, such as chaotic records and a lack of proper checks. Officials relied on internal assurances without verifying facts, ignored warnings from the Department of Health, and failed to enforce rules like SAHPRA registration. This non-compliance put the entire project at risk and could have led to unsafe oxygen systems in hospitals.
Fraud allegations stood out, with one firm suspected of using bogus papers to win a big chunk of the deal. The report also slammed the absence of risk committees to spot and fix problems early. Governance wise, the IDT suffered from weak internal controls, no timely audits, and cash flow woes that once needed bailouts for staff pay. These systemic flaws echoed broader troubles at the IDT, including past claims of mismanagement under former leaders.
In a related note, fresh reports from investigative groups have flagged possible bid rigging in other IDT projects, like R436 million road fixes in KwaZulu-Natal, where docs were ignored, hinting at deeper rot.
Recommendations and Calls for Accountability
PwC urged disciplinary steps against key figures, naming IDT CEO Tebogo Malaka and General Manager for Supply Chain Management Dr Molebedi Sisi. Malaka was faulted for not checking documents, skipping risk meetings, and brushing off Health Department alerts. Sisi misled others by claiming compliance when vital rules, like SAHPRA licences, were skipped. The report called for action against other staff too, to tackle the root causes.
Macpherson has acted swiftly. He wrote to the Directorate for Priority Crime Investigation (Hawks) to probe criminal angles, shared the report with Health Minister Dr Aaron Motsoaledi, and met the new IDT board to start consequence management. He also stabilized the board by April 2025, adding five trustees to make it fully functional after over 18 months of gaps, and plans lifestyle audits for senior staff.
The minister faced pushback, including a smear drive with fake call logs and AI-made voice notes, which he linked to political foes trying to halt the cleanup. Still, he vowed to press on, saying no donor funds went out under the flawed tender.
Health Minister’s Response and Project Update
Dr Aaron Motsoaledi has welcomed the report’s release, saying it lifts “the cloud hanging above the tender.” He is glad the Department of Health lost no money and that Global Fund donations stay safe. “It would have been a sad day if donor funds were to disappear under our watch,” he said.
Motsoaledi stressed that those involved did not just steal cash but robbed South Africans of life-saving oxygen. “They did not just commit financial corruption but deprived South Africans of urgent life support in the form of oxygen,” the department noted. He wants the law to run its course and culprits held to account.
When corruption hints first hit the media, Motsoaledi and Macpherson quickly pulled the tender from the IDT on 5 December 2024 and shifted it to the Development Bank of Southern Africa (DBSA). This move kept the project alive. Now, with the report out, the DBSA’s work will speed up to finish the oxygen plants soon, benefiting hospitals and patients nationwide.
The minister is relieved the probe cleared his department of any financial wrongdoing, preserving ties with the Global Fund. “I am also satisfied that the report has not pointed any fingers at the Department of Health for any financial misdemeanour that may cast aspersions on the integrity of the department,” he added.
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