Public Works Minister Dean Macpherson on Tuesday released a forensic report into an irregular R836m oxygen plant tender put out by the Independent Development Trust (IDT).
At a press conference on Tuesday, 29 July, Public Works Minister Dean Macpherson confirmed the scale and brazenness of procurement fraud in a multimillion-rand project to install oxygen generation plants at 55 state hospitals across South Africa.
The forensic investigation, conducted by PwC, followed Daily Maverick’s revelations in October 2024 that an apparent “ghost company” had clinched the largest portion of the R836-million project, for which the Independent Development Trust (IDT) put out a tender.
Read more: ‘Ghost company’ bags R428m oxygen plants tender for state hospitals
Follow-up reports by Daily Maverick and amaBhungane revealed more red flags regarding the contracts awarded to Bulkeng and a joint venture made up of Maziya General Trading and On Site Gas Systems International.
Read more: Alleged tender fraud, shock ‘death’ of contractor cloud R836m hospital oxygen plants project
Our investigation revealed that Bulkeng did not possess the necessary certification to deal in medical equipment, among other red flags.
“The first time I was made aware of this matter was through the media,” said Macpherson, referring to Daily Maverick’s first exposé.
What comes next?
The final forensic report by PwC has been handed over to the Special Investigating Unit (SIU), the Hawks, the SA Police Service (SAPS) and the National Prosecuting Authority (NPA) for further investigation.
The PwC report recommended disciplinary steps against Tebogo Malaka, the IDT’s CEO. It remains to be seen what action the IDT’s board of trustees decides to take.
Approximately 400 IDT employees have been flagged for lifestyle audits.
Macpherson has appointed a new IDT board following the dismissal of trustees who failed to act on early warnings.
In a 29 July statement, the new board said: “We are committed to ensuring a lawful, fair and transparent response guided by both the recommendations of the report and the requirements of our internal policies.
“We wish to assure all stakeholders that we take these matters seriously.”
The tender that choked
The IDT, a state entity that falls under the Department of Public Works and Infrastructure (DPWI), had been appointed by the National Department of Health (NDoH) to act as an implementing agent for the oxygen plants project.
The funding came from the Global Fund, an international financing initiative to support treatment of critical illnesses aligned with the United Nations Sustainable Development Goals.
The project aimed to install pressure swing adsorption (PSA) oxygen plants at 55 hospitals — a technology that allows facilities to generate oxygen without relying on cylinder delivery. Initially budgeted at R260-million, the cost eventually ballooned to R836-million.
Bulkeng was awarded 45 sites worth R428-million, while the Maziya-On Site Gas Systems joint venture was awarded 10 sites worth R152-million. The Global Fund issued a formal “No Objection” to the appointment, based on assurances received from the IDT.
Procurement bypass
Despite the project’s critical nature and scale, key procurement safeguards were ignored. Macpherson confirmed that SA Health Products Regulatory Authority (Sahpra) licensing was retrospectively deemed unnecessary, despite earlier requirements for it in the project plan.
No formal minutes were kept of certain bid committee meetings. Officials from the NDoH, who were supposed to serve as neutral observers, were instead appointed as voting members of the bid evaluation committee — violating separation-of-duty protocols.
Fraud: an anatomy
PwC found that Bulkeng had no physical premises, no staff and no previous infrastructure experience, confirming Daily Maverick’s initial reportage.
The firm used another company’s Sahpra licence without authorisation and submitted forged witness signatures in its bid documents. It also falsely claimed to be in a joint venture with “Brutas Atlas Copco Industrial South Africa”, a fictitious name combining Brutes Air Solutions and Atlas Copco.
While the initial project implementation plan required Sahpra certification and Construction Industry Development Board grading, these were omitted from the final request for quotation. The internal steering committee flagged this and recommended that the procurement be restarted. Instead, IDT CEO Malaka secured a concurrence letter from NDoH Director-General Sandile Buthelezi to bypass the issue.
PwC further found that Bulkeng was permitted to submit bid documents after the official deadline. The unit cost per site escalated from an estimated R3.6-million to more than R10.5-million, with PwC concluding there was “no credible explanation” for the increase.
The director of Bulkeng, Nkosinathi Ndlovu, was reported to have died shortly after giving media interviews, but this has not been confirmed by the SAPS.
Why our journalism matters
Between October and November 2024, Daily Maverick and amaBhungane published a joint investigation exposing Bulkeng’s fake credentials, forged documents, and licensing shortfalls. The exposé drew on whistleblower disclosures, access to procurement records and on-the-ground source interviews.
It directly prompted the commissioning of the PwC forensic report.
Read more: PwC launches forensic investigation into IDT’s troubling R836-million oxygen plants project
The IDT — a cautionary tale
This is not the first time the IDT has faced serious governance failures. In 2012, a R1.6-billion fencing contract with the Department of Correctional Services was annulled by a Special Tribunal.
In 2020, the then public works minister, Patricia de Lille, unsuccessfully attempted to dissolve the IDT.
Treasury-led investigations into IDT CEO Malaka were reportedly suppressed during Sihle Zikalala’s tenure as public works minister. The Auditor-General has repeatedly flagged irregular spending and internal control breakdowns at the agency.
Oxygen deferred
By December 2024, not a single PSA oxygen plant had been commissioned. Many targeted hospitals remain reliant on costly cylinder-delivered oxygen.
The Department of Health is expected to re-tender the project. The Global Fund has launched its own compliance review.
“I asked for documentation — I was told everything was in order. A month later, the same board admitted there was a problem,” said Macpherson.
He has indicated that the PwC report will inform broader procurement reform efforts across the Department of Public Works and its entities. DM
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