R500 million irregular security contracts extended at Gauteng hospitals 

6 July 2017

Security contracts for Gauteng hospitals and contracts that cost more than R500 million a year have been extended since September last year despite a forensic audit finding that they were irregularly awarded.

According to a written reply by Gauteng Health MEC Gwen Ramokgopa to my questions in the Gauteng Legislature, the contracts were awarded on 1 October 2014 and were supposed to end on 31 September 2016.

The contracts cover 34 hospitals and 188 clinics, and cost R525 million from October 2015 to September 2016.

Ramokgopa says that according to legal advice the Department gave implicated companies opportunity to make representations. One of the companies abandoned site before the investigation could be finalized and and another company was exonerated.

The senior official responsible was dismissed and police laid criminal charges against him. Disciplinary action was also taken against four officials who sat on the bid committee that awarded the contracts.

My concern is that 16 security companies that should not have qualified to get contacts are still guarding hospitals and clinics nine months after the original two-year contract expired.

The Department claims that they could not get money back from the companies because legally they had enjoyed their services, but why were their contracts extended?

This is a very unsatisfactory way to deal with irregularly awarded contracts.

The Department's security costs have more than doubled in the last four years and I suspect we are not getting good value for money.

It now costs R33 million a year to guard the Charlotte Maxeke Johannesburg Hospital and annual costs for large hospitals are as follows:

Chris Hani Baragwanath Hospital - R28 million

Steve Biko Hospital - R20 million

Thelle Mogoerane and Far East Rand hospitals - R18 million each

Helen Joseph Hospital - R17 million

George Mukhari Hospital - R16 million

Kalafong Hospital - R15 million

Rahima Moosa Hospital - R12 million 

Leratong, Sebokeng and Bertha Gxowa hospitals - R10 million each

New security contracts should be awarded in an open process that ensures competence and best value for money. 

Issued by Jack Bloom, DA Gauteng Shadow Health MEC, 6 July 2017