North West coal tender in dispute: ‘Nothing irregular’, says health department

The North West heath department is fending off new claims of irregularity in the tender for the supply of coal to various hospitals across the province.

This comes just months after the department was forced to explain before court why the most expensive suppliers had been preferred over those who submitted cheaper bids.

In the latest round of allegations, some of the disgruntled bidders who lost out in the award of the coal tender claim that the chairperson on the bid adjudication committee, William Kaipa, was a former employee of Sibusisiwe Contractor, one of the two companies that won multiple contracts to supply four hospitals each – out of a total of 10 hospitals – while 63 other bidders lost out.

But City Press has learnt that the health department was considering extortion charges against people behind the Kaipa allegations on the grounds that some were threatening to go public with the claims if department officials did not give them new business.

Kaipa denied that he was ever employed by Sibusisiwe, saying that he was also not aware that a 2018 document appearing to be a profile of the company had his details as engineering manager.

All members who participate in tender processes of the department are always requested to declare any information that relate to their involvement with bidders and none of the participants declared on this tender.
Provincial health spokesperson Tebogo Lekgethwane

However, a similar document retrieved from the internet did not show Kaipa’s name, and Sibusiso Sithole, owner of Sibusisiwe, did not answer calls or respond to messages despite indications that the phone line was active.

“If true, this is a fraudulent presentation and the matter must be dealt with by the SAPS Commercial crime unit,” said Kaipa, who was chief mechanical engineer in the department until May 1 when he was promoted to acting director for infrastructure planning, according to an internal memorandum.

Provincial health spokesperson Tebogo Lekgethwane said the department had not established any relationship between Kaipa and Sibusisiwe.

“In trying to get to the bottom of the allegations, the department went through Kaipa’s employment file for verification and nothing relating to his relationship with Sibusisiwe Contractor was picked up,” Lekgethwane said.

“It is also important to mention that all members who participate in tender processes of the department are always requested to declare any information that relate to their involvement with bidders and none of the participants declared on this tender,” he said.

In October last year the department gave three-year contracts to three companies to supply the coal.

Sibusisiwe would supply Mafikeng Provincial Hospital (R2 350 per tonne), Gelukspan Hospital (R2 360 per tonne), Schweizer-Reneke Hospital (R2 450 per tonne) and Taung Hospital (R2 570 per tonne).

Moemedi Creations got Klerksdorp Hospital, Potchefstroom Hospital and Tshepong Hospital in Klerksdorp (all at R1 950 per tonne), as well as Job Shimankana Tabane Hospital in Rustenburg (R2 100 per tonne).

The other two companies, Lorato Consulting and KC Production & Consulting, got Witrand Hospital in Potchefstroom (R1 500 per tonne) and Nic Bodenstein Hospital in Wolmaranstad (R1 300 per tonne), respectively.

We find the awarding criteria by the department appalling and disingenuous.
Zandi Mqamba of Four Riverheads

Last November two service providers – Four Riverheads and Matokelo Trading – who both lost out in their respective bids, sought to interdict the department from concluding the contracts with the winning bidders or suspending the work if contracts had already been signed.

The applicants could not persuade the court regarding the urgency and questions had also been raised that other affected parties had not been joined to the application.

The applicants had contested that the bid was on a 90/10 criteria in terms of pricing, however bidders who priced exorbitantly high were awarded as opposed to the lowest priced.

“We find the awarding criteria by the department appalling and disingenuous. In some instances they appointed two different bidders for the same town (Potchefstroom) with two different prices (R1 950 & R1 500 per tonne),” said Zandi Mqamba of Four Riverheads.

Mqamba said the price of coal was determined by the proximity of the hospital to the coal source but in the case of Rustenburg, which was the nearest, it was priced at R2 100 as compared to the furthest hospital in Wolmaranstad priced at R1 300.

“The department failed in its duty to be transparent during the evaluation process. Wherefore, we are convinced that supply chain management processes were flouted,” he said.

In its opposing affidavit the department said the two companies had failed to provide “delivery vehicle capacity proof/registration certificate” and this failed the functionality phase of evaluation and could not proceed to pricing evaluation.

“The fact that both applicants’ pricing were lower than the bidders that were appointed for the tender … is immaterial and irrelevant because both applicants failed to attain minimum score,” said Bertha Maleka, the chief financial officer.

In response to City Press, Lekgethwane said in the evaluation of pricing the department “considered the risk based on price and it was noted that only offers that were realistically priced would be considered”.

“Therefore unrealistic offers (where it was considered that the price offers were not economically possible to execute the contract) should be excluded, as they are inherently risky,” he said.

He said the other two companies with lower pricing were included based on the fact that departments were going to have budgets cuts in the following financial year.

“Taking into account the average market price analysis, the two service providers that gave lower prices are very risky due to the fact that their prices do not include transportation of the commodity and if transportation costs are added it clearly shows that the two service providers will run at loss,” he said.


Setumo Stone 

Political Journalist

+27 11 713 9001
69 Kingsway Rd, Auckland Park
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