Macpherson outlines report recommendations on R800m oxygen plant tender

The final PricewaterhouseCoopers (PwC) forensic report into the R800 million Pressure Swing Adsorption (PSA) Oxygen Plant tender has made recommendations for disciplinary action to be taken against all individuals implicated in wrongdoing in the awarding of the tender.

The tender was intended to deliver life-saving PSA oxygen plants to 60 hospitals across the country, which were meant to ensure a reliable and sustainable supply of oxygen, particularly in response to the COVID-19 pandemic. This was a project worth R836 million, of which R528 million had been allocated directly to the Independent Development Trust (IDT) for implementation.

Public Works and Infrastructure Minister, Dean Macpherson, on Tuesday addressed a media briefing in Pretoria on the outcomes of the forensic investigation by PwC. 

“The investigation… recommended disciplinary referrals against several other IDT executives and SCM officials,” Macpherson said.

The investigation by PwC into circumstances surrounding the tender follows the IDT’s admission last year that three companies were awarded the tender, despite two lacking the necessary registration with the South African Health Products Regulatory Authority (SAHPRA). This includes claims that one company may have submitted fraudulent documentation.

At the time of the appointment of PwC, Macpherson expressed confidence that the investigation would clear innocent individuals, while holding guilty parties to account.

READ | Macpherson welcomes PwC probe into R800m oxygen plant tender

“I have formally briefed the newly constituted IDT Board on the contents of the report. I am confident that the board will consider the report’s recommendations and other related matters in due course,” Macpherson said.

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Report findings

According to Macpherson, over the last six months, investigators conducted over 40 interviews with departmental officials, IDT executives, contractors and oversight stakeholders.

“They reviewed more than 90 procurement documents, analysed financial records, and conducted Companies and Intellectual Property Commission (CIPC), Construction Industry Development Board (CIDB) and SAHPRA verifications,” Macpherson said.

Among others, the forensic report confirmed that multiple companies awarded work under the PSA project did not have valid SAHPRA licensing.

One company, Bulkeng (Pty) Ltd, submitted a SAHPRA licence belonging to Atlas Copco Industrial SA without the knowledge or consent of Atlas Copco. 

Investigators found that the bid evaluation process was deeply flawed. This also includes discovering that meeting minutes were missing or incomplete, and that committee appointments were not properly constituted and bid scores were not properly documented.

In one example, the investigation found that the original Department of Health budget for the project was R216 million, but when the IDT issued the request for quotation (RFQ), prices ballooned to over R590 million without documented approval or value-for-money assessment.

Recommendations

Macpherson outlined recommendations from the PwC forensic report, which proposed that appropriate action be taken “against the relevant officials who were involved in the PSA oxygen plant project, as far as they have not addressed the issues that were raised by the NDoH [National Department of Health] adequately during the procurement process”.

This, according to the report, includes action against, but not limited to:

• Ms Malaka, as the IDT CEO, for confirming the procurement process followed in the RFQ process was correct, whereas there were irregularities identified, and for the appointment of NDoH officials as members and not as observers, as prescribed by the Memorandum of Agreement (MoA), as well as the Infrastructure Programme Implementation Plan (IPIP).
• Ms Malaka for not ensuring the proper establishment, composition and functioning of the Bid Specification Committee (BSC) and Bid Evaluation Committee (BEC), as stipulated in paragraph 8.1 of the National Treasury Public Finance Management Act (PFMA) Supply Chain Management (SCM) Instruction No. 03 of 2021/22 on Enhancing Compliance, Transparency and Accountability in SCM by appointing NDoH officials as members and not as observers to the respective committees, as prescribed in the MoA.
• Ms Malaka, together with Dr Sisi, the as SCM General Manager, did not handle the issues identified and raised relating to the procurement process followed in a fair, transparent and equitable manner as provided for in the IDT SCM Policy (paragraph 39.1.1) and Section 217(1) of the Constitution.

In July 2025, Cabinet appointed a full-term Board to the IDT.  That Board took office on 5 July, ending more than a year of instability.

The new Board includes the reappointment of Zimbini Hill as Chairperson and Professor Raymond Nkado as Deputy Chairperson.

READ | New Chairperson and Deputy Chairperson of IDT elected

Meanwhile, the Board of Trustees of the IDT has confirmed that it has received the final forensic report.

“The Board notes the serious findings highlighted in the Minister’s public address today, including evidence of procurement irregularities, governance failures and regulatory breaches related to the PSA oxygen plant project. 

“We echo the Minister’s commitment to clean governance, institutional accountability and the protection of public and donor funds,” the Board said in a statement.  

The Board said it is committed to ensuring a lawful, fair and transparent response guided by both the recommendations of the report and the requirements of internal policies. 

“We wish to assure all stakeholders that we take these matters seriously. The board is determined to restore institutional credibility, rebuild confidence in the IDT’s procurement and governance systems and uphold the trust placed in us by the South African public.” – SAnews.gov.za

Source: https://www.sanews.gov.za/south-africa/macpherson-outlines-report-recommendations-r800m-oxygen-plant-tender

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