Offer to buy McCord Hospital ‘too low’

2013-09-21 09:14

The KwaZulu-Natal health department’s offer to buy the 104-year old McCord Hospital in Durban was far too low, the board said.

The board had agreed to discount the independent valuation of the property by more than 40% in order to try and find a solution with the department.

“Unfortunately, the DOH’s [health department] offer, in terms of the financial consideration for the properties was far less than this amount.”

Despite the closure, staff would remain employed until their retrenchment was finalised.

Earlier this week, the board said the facility would close yesterday after a breakdown in talks about the KwaZulu-Natal health department taking over the hospital.

Earlier this year, the hospital was slated for closure after the department opted not to renew its annual subsidy.

At the end of January, health MEC Sibongiseni Dhlomo announced that the department had made an offer to take over the hospital.

The board said yesterday the department’s offer not only failed to reach the discounted value of the hospital’s assets, it failed to adequately relieve the hospital board of its obligations, including existing and future claims that might be made against the board.

“Unfortunately, the decrease and ultimately cessation of the subsidy from the DOH, coupled with the loss of funding from the US Presidents Emergency Plan for Aids Relief, among others, have left us no option but to cease operations,” the board’s spokesman and business manager Gerard Ronan was quoted as saying.

“The possibility exists that there would be inadequate cover for future claims and liabilities against the company which have been estimated at between R50 million and R100 million.

“There are also the companies’ obligations to the staff and creditors that might not be adequately covered, and thus potentially exposing the directors to personal financial risk,” he said.

Provincial health spokesman Sam Mkhwanazi said on Thursday the department would comment on the hospital’s closure in due course.

Unions and opposition parties have called on the board and the department to keep the hospital open.

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