Years of maladministration, flouting of the Public Finance Management Act (PFMA), irregular appointments, lack of accountability and political immunity have now impacted the most vulnerable people in the province, the sick and mentally disabled.
A Finweek investigation into the province’s health, public works and treasury departments has made some alarming discoveries in a province that prefers to fly below the radar.
Essentially the issue revolves around a new mega mental health facility being built in Kimberley.
Meant to be the largest in the Southern Hemisphere, it has turned into nothing more than an eyesore.
Construction started in 2005, and the hospital was meant to have been completed in 2008 at the tendered price of R290m. Currently, it is estimated that the project will cost R1.1bn and possibly only be completed in March 2014.
The original contract was given to a bookkeeping company with no verifiable experience in construction.
Well, to be accurate, it was given to a joint venture led by a company called Vista Park. Vista Park had two directors, Andrew Scholtz and an entity called Bloemfontein Boekhouers & Sekretariële Dienste.
It appears that there was no proper due diligence done in awarding the contract, a process run by the Northern Cape’s now disbanded tender board.
In fact the provincial department of public works told the tender board its preferred bidder was Grinaker LTA, an established construction group that tendered R324m. Still the tender board awarded the contract to Vista Park. It’s not clear why and it’s also unclear who sat on that tender board and an investigation is underway.
Tender boards are no longer valid bodies under the PFMA, and the Northern Cape tender board was phased out soon after the hospital contract was awarded.
The province was called before parliament’s Standing Committee on Public Accounts (Scopa) last week, following a site visit by Scopa to Kimberley earlier this year.
The province duly sent 21 delegates to brief Scopa, led by Dawid Rooi, current MEC for Roads and Public Works in the Northern Cape. The incumbent MEC for Finance in the province, John Block, was also ordered to appear before Scopa but he did not show up for the meeting.
The top five leaders of the ANC in the province are currently all being investigated on charges of fraud and corruption.
Fred Wyngaard, Cope-MPL in the Northern Cape and leader of the opposition in the province, says the five of them are running the province like their own piggy bank.
“Consider this: the entire Northern Cape province’s executive, as well as the oversight committees in the province, are ANC members and they all report to Block as ANC provincial chairman. It appears that there’s a lot of cover-up going on. Even the Auditor General says in his annual report that he can’t get the information he needs out of the province.”
Wyngaard says the total unauthorised expenditure and wasteful and irregular spending for the province over the past two years was R2.4bn, a big portion of this is linked to the mental hospital project.
Thapelo Chiloane, ANC-MP and member of Scopa, says it’s also unfathomable how the hospital project had been allowed to continue.
“The province issued penalties to the amount of R20 000 a day but never collected it. The department itself has admitted the penalties totalled about R11m but nothing was ever collected, and the contractor who was in breach of contract was simply allowed to continue,” Chiloane says.
Ruth Palm, currently chief director for roads in the Northern Cape, was the acting head of the public works department in 2008/2009.
Palm was asked why no penalties were collected.
“At the time the department’s project manager wrote a letter to the project manager of the hospital instructing him not to collect the penalties. Unfortunately that manager has since passed away and as dead men tell no tales, we don’t know why he made that order.
Palm was asked why she didn’t monitor the manager but she was unable to answer saying she was simply acting in the position temporarily.
The contract was eventually cancelled and a new contractor, Inyatsi Construction, was appointed in November 2011.The second contractor won the tender to complete the hospital with a bid of R400m.
Now, however, Finweek has discovered that the province has depleted the funds set aside for the project.
This has forced the province to pay the costs of the Kimberley Mental Hospital from the budgets meant for other hospitals in the province.
Some of the province’s poorest towns, Kuruman, Postmasburg and De Aar, are now left stranded with seemingly no budget allocated to their medical facilities for at least the next few years.
De Aar has for years had the dubious honour of being the area in the world where the largest number of foetal alcohol syndrome cases are found. The province as a whole has around 6 000 mental patients.
Dr Faith Matlaopane, head of the province’s health department, admits the province currently has no budget to complete the hospital. She denies that the other towns are affected.
“We can say on the record that De Aar is being affected. But the other two towns are not.
Roy Ainslie, a member of Scopa, disagrees. “I’m concerned and I’m not the only one concerned about the possibility that money could be irregularly being transferred from one project in the province to another. The National Council of Provinces has received reports from Postmasburg and Kuruman, complaining about their funding being taken away. Taking this funding away is in the least irregular and may even be illegal,” Ainslie says.
Matlaopane denied this.
It appears the money is being diverted from the Hospital Revitalisation Grant, that’s meant to replace and upgrade existing hospitals in the province. Kuruman, Postmasburg and De Aar are listed as priorities according to this grant.
Some construction has started at the De Aar hospital, which mainly involves earthworks. But there is no budget available to continue. The project started in 2010 and was meant to be completed this year at an estimated R400m.
According to provincial budgetary documents Finweek has seen, it appears that there’s no more money budgeted for Postmasburg until at least 2017.
Small wonder the Department of Health received an audit disclaimer this year.
Currently the matter is being investigated by a number of entities, including Scopa.
Monwabisi Nkompela, spokesperson for the premier of the Northern Cape, says the premier is looking into the mental health hospital project.
He says the province has another facility in Kimberley for mental health patients, but admits the facility is no longer adequate and is overstrained. (The new facility will probably only be completed by 2014.)
Nkompela says the health department has received an audit disclaimer from the Auditor General for the past eight years. “The Department of Public Works also didn’t get a clean bill of health this year.”
He denies that the province has a corruption problem and claims instead that corruption in the province occurs only in isolated incidents.
“It’s not like there’s rampant corruption in the province. That would mean the [provincial] government is wasting people’s money but we’re not.”
Nkompela was then asked to confirm the R2.4bn of irregular and wasteful expenditure mentioned by Wyngaard.
“Well, yes that amount is accurate, but it’s for a period of about five years, not one year.”
He says the province is addressing all incidents of corruption and says the premier will “leave no stone unturned” to investigate wrongdoing in the province.
He didn’t comment when asked about the provincial ANC’s role in the province. When asked about MECs currently facing corruption charges, he said: “We believe there’s no need for any suspensions until a court has found against the individuals.
Andrew Scholtz could not be reached for comment. It appears that since the liquidation of Vista Park, no-one has seen neither hide nor hair of him, after he disappeared with close on R437m leaving a derelict empty shell of a hospital behind