KZN's mystery R61 million bus tender

By Drum Digital
27 January 2015

A tender for four mobile clinics in KwaZulu-Natal will end up costing taxpayers a "crazy" R61 million -- and only two of the units have been delivered.

Of that amount, R52m is being spent on leasing a truck and trailer that has a standard X-ray machine, which at the end of the three-year lease, the department will not even own.

Two companies -- Mzansi Lifecare (Pty) Ltd and Mobile Satellite Technologies (MST) -- won the tenders.

The story caused an associate of Mzansi Lifecare to call a Sapa reporter and threaten to "deal with him personally" if he wrote the "wrong thing" about the tender (See KZN-HEALTH-THREAT sidebar).

These companies were meant to provide four mobile health units to the provincial health department. Only two were delivered and, by August 2016, they will have cost as much as R61 million.

MST was asked to provide one unit, but won a tender to provide three units without knowing it.

"My stomach turns when I hear this. We only got an order for one unit. We only supplied one unit," said Mobile Satellite Technologies (MST) chief executive Fernando Acafrao.

According to the Government Gazette of June 21, 2013, the Cape Town-based MST was to provide the KwaZulu-Natal health department with three vehicles -- a mobile primary health care unit, a mobile school health unit, and a mobile dental and eye unit.

Johannesburg-based Mzansi Lifecare (Pty) Ltd was to provide a mobile hospital unit.

The tender, ZNB 9281/2012-H, appears in a document entitled The Main Contract Register 20122013, found on the department's website. This register details what each company is to be paid and for what period.

The mobile school unit was billed at R4.6m. The primary health care unit and the dental and eye unit were listed as having cost the department R4.9m each.

The problem with the MST portion of the tender is that MST did not know it had won the tender for three vehicles.

Acafrao said his company had only ever been asked to provide one vehicle, which was delivered in October 2013.

Acafrao said the unit had been sold to the department for R4.9m and that the department was paying about R100,000 a month to MST for the vehicle's operational costs over three years ending August 2016.

In its bid Mzansi Lifecare submitted two quotes for the mobile hospital unit, for R54m and R62.8m. The latter figure included staff. The department however awarded it a tender for R52.5m.

A search on the Companies and Intellectual Properties Commission website revealed the company was registered on May 29, 2012, with Nandi Sakhile Msimang and Andrey Timshchenko as directors.

It was registered 17 days before the department published a request for information "for provision of universal mobile unit/s for provision of Integrated Health Services in KZN" in the Government Gazette of June, 15, 2012.

On August 2, 2013, Dr Sibongile Zungu, the embattled head of the KwaZulu-Natal health department, signed off on the tender, agreeing the department would pay Mzansi Lifecare R1.5m every month to lease the vehicle without staff.

It is not known how the bid evaluation committee and finally the bid adjudication committee reached the conclusion that Mzansi Lifecare's bid was the best one.

It is also not known how many companies submitted bids to provide the mobile hospital unit, or if in fact there were any other bidders apart from Mzansi Lifecare.

The company did not respond to questions from Sapa about its tax compliance certificate; or its broad-based black economic empowerment status. Sapa could not find copies of these certificates.

Mzansi Lifecare's vehicle was unveiled by KwaZulu-Natal health MEC Sibongiseni Dhlomo last July. The Newcastle Advertiser reported that at the event Dhlomo revealed the unit was one of four mobile hospitals the department planned on having. It was built by the Dutch company Lamboo Mobile Medical.

Wilfred van der Klauw, Lamboo's business development manager who attended the unveiling, said earlier this month his company had only supplied one vehicle to Mzansi Lifecare. He could not reveal for how much it was sold to Mzansi.

However, he provided detailed plans and pictures showing the vehicle's specifications.

To determine how much such a vehicle would cost, Sapa contacted a company not involved in the tender in any way and sent it the plans and pictures.

It was informed that the vehicle had cost the department US5.1m -- the dollar value of the R52.5m lease at the time the award was published in the Government Gazette of June 21. The company was not informed who had built the vehicle or who had been awarded the tender.

"That kind of money is crazy. If it cost that much, you already wasted four-and-a-half million [dollars]," was the reaction from Richard M Dinse, the vice president of LifeLine Mobile, a company based in the US state of Ohio that manufactures such vehicles.

After he had examined the pictures and the plan, Dinse wrote in an e-mail: "As I mentioned to you, I couldn't believe the amount charged for the three-year 'lease' of this medical unit.

"For the price they were charged, LifeLine could have delivered four identical vans to Durban. And, it wouldn't be on a lease agreement; they would own all four of the vans."

He said the company could supply a 12m-long vehicle with a comparable floor plan with an X-ray and ultrasound machine for about US1.1m (R12.5m at current exchange rate). That price, he said, would include a tent, training, and warranty costs.

"As I mentioned previously, this is the sale price, not a lease agreement," he said.

The provincial health department was contacted for comment last week Wednesday.

By 4.30pm on Tuesday, department spokesman Sam Mkhwanazi said a response had been prepared, but could only be sent later as there was a power outage.

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