A shocking report by the Auditor General made public last week reveals manifold irregularities in the appointment of 3P Consultancy in June 2007 to run the Project Management Unit (PMU) in the Gauteng Health Department.
It is ironic that this report is released during my five day suspension from the Gauteng Legislature for questioning the relationship between former Gauteng Health MEC Brian Hlongwa and Mr Richard Payne, the MD of 3P, who are close friends.
According to the report:
1. The Terms of Reference for the tender was not signed by the Head of Department nor approved by the Department Acquisition Council.
2. A well-thought-through cost estimate was not provided.
3. The advertisement was not advertised in the Government Tender Bulletin, and the closing date was only 15 days instead of the required four weeks.
4. The officials involved in opening the bids were also members of the bid evaluation committee and involved in the evaluation of the bids contrary to regulations.
5. There was no clear evidence that there was approval for funding from the Provincial Treasury.
6. The department could not provide supporting documents for invoices for payments totaling more than R262 million.
7. Duplicate payments totaling R7.1 million were made.
8. A R10.7 million project administration fee was paid to 3P despite no reference to this in the service agreement with the department.
A key finding is that 3P should have been disqualified from the bid to run the PMU as they had recommended that the PMU be set up in the first place.
3P was paid R269 million for two years instead of the budgeted R137 million and much remains unexplained as the department failed to provide all the documentation requested by the Auditor General.
The report recommends that Health MEC Qedani Mahlangu "reconsider the engagement with the consultant; recover the duplicate payments from the consultant; and obtain legal advice on the available measures against those responsible for not complying with the relevant prescripts and for incurring irregular expenditure."
Mahlangu has already cancelled the R273 million 3P contract which was extended for three years, and this is currently being contested in court.
The Project Management Unit run by 3P was born in sin and was a major cause of waste and mismanagement in the Gauteng Health department.
According to the Auditor General, there was "inadequate leadership oversight" which in my view is directly attributable to former Health MEC Brian Hlongwa.
It is not sufficient to simply blame officials. Hlongwa must be held fully to account for the 3P disaster, and we cannot exclude the possibility of corruption.
The Special Investigating Unit must be called in and criminal charges laid where necessary.
It is appalling that Hlongwa still holds a senior leadership role as ANC Chief Whip in the Legislature. If Premier Nomvula Mokonyane is serious about cleaning up corruption, she should suspend him now while further investigations continue.
Instead of me apologising for exposing possible corruption, the Chairman of the Privileges and Ethics Committee, Deputy Speaker Steward Ngwenya, should apologise to me for making a false finding without allowing me the opportunity to dispute it. (Note: the committee found that "There was no evidence of any ground for a valid criticism of the award to 3P Consulting and no evidence that Hlongwa was in any way involved in the tender process.")
This is why I am going to court to set aside their report as it infringes my right to free speech in the public interest.
Statement issued by Jack Bloom, MPL (Suspended), Democratic Alliance corruption spokesman, November 23 2009
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