By Thapelo Molefe
Minister of Public Works and Infrastructure, Dean Macpherson, has called for disciplinary action against CEO Tebogo Malaka, General Manager of Supply Chain Management Dr. Molebedi Sisi, and several other officials involved in the controversial R836 million oxygen plant tender awarded by the Independent Development Trust (IDT).
Briefing the media on Tuesday, Macpherson described the R836 million oxygen plant tender scandal as “a monumental failure in governance” and confirmed that a report compiled by PricewaterhouseCoopers (PwC) has been handed over to the Hawks for criminal investigation.
“These findings, ladies and gentlemen, represent a monumental failure in governance and adherence to IDT policies and National Treasury regulations, undermining the integrity of public procurement and threatening donor funds,” Macpherson said.
The tender, valued at R836 million, was issued by the IDT in its capacity as the implementing agent for the Department of Health.
It aimed to install Pressure Swing Adsorption (PSA) oxygen plants at 60 public hospitals across the country—a critical, life-saving intervention during and after the COVID-19 pandemic.
The report singles out Malaka and Sisi for enabling irregular procurement processes.
“The CEO of the IDT, Ms. Tebogo Malaka, failed to exercise oversight. She relied entirely on internal SEM staff to assure her that the processes had followed proper procurement protocol,” said Macpherson.
“She did not verify any of the documentation. She did not act on any of the red flags raised by the Department of Health.”
“Dr. Sisi, on the other hand, misled internal stakeholders and failed to act in accordance with his responsibilities. He advised against cancelling the RFQ process despite clear warnings from the Department of Health.”
The minister said steps were being taken to ensure consequence management and accountability.
“This will include writing to the Hawks and providing them with the report to supplement their current criminal investigation into this matter,” Macpherson said.
He confirmed that disciplinary referrals had also been made against several IDT officials.
“The forensic report recommends disciplinary action should be taken against Ms. Malaka and Dr. Sisi, which will fall within the purview of the IDT board,” he said.
“The investigation further recommends disciplinary referrals against several other IDT executives and SCM officials.”
The controversy was first exposed in an investigative article by Daily Maverick in October 2024. One of the contractors, awarded a contract worth over R400 million, allegedly lacked SAHPRA certification, submitted questionable documents, and appeared to be a ghost entity—with no verifiable contact details, premises, or operational capacity.
“I firstly want to pay tribute to the media who first blew the whistle on this matter,” Macpherson said.
“Investigative journalism in South Africa is an asset to our country and holds us in public office, as well as those in public entities, accountable for the work that we undertake.”
The forensic report revealed that several service providers were appointed without confirming whether they met SAHPRA requirements.
The requirement “was again not” included as a mandatory requirement in the RFQ as required by legislation.
“It appears that the IDT appointed eight service providers on the panel for the rollout of the PSA oxygen plant without confirming that any of the appointed service providers met the required criteria,” Macpherson quoted from the report.
The most glaring example was the appointment of Bulkeng (Pty) Ltd.
The minister said: “The report found that Bulkeng was awarded facilities with a total offer of R428 million which exceeded their CIDB grading threshold of R200 million which means that they did not qualify at all to be awarded that project.”
Furthermore, the company used a SAHPRA licence it had no authority to submit.
“Bulkeng as one of the preferred service providers did not have the required authorisation to use Atlas Copco’s SAHPRA licence and the use therefore in their submission to the IDT appears to be irregular,” Macpherson said.
“In simple language, it’s called fraud.”
Bulkeng also intended to subcontract more than 25% of its work to Brutes Air Solutions without disclosing this, which violated preferential procurement regulations.
“Moreover, Bulkeng intended to subcontract more than 25% of its responsibilities to Brutes Air Solutions but failed to disclose this in violation of preferential procurement regulations,” the Minister said.
The cost of the project soared without proper justification.
The Department of Health’s original budget was R216 million.
When the RFQ was issued, prices ballooned to R592 million.
“The project was therefore increased by a staggering 174% from the initial estimated budget,” Macpherson said.
“This budget, however, was approved by both the Global Fund and the Department of Health. Despite the fact that the issues were raised by the Head of Health Facilities and Infrastructure Management… the reason for putting the Department at risk of losing Global Fund money is not sufficient to proceed with the procurement of an irregular supply chain management process.”
The report found that the IDT was in disarray during the procurement process.
“It was operating with 7 trustees, short of the 8 required to legally function. There was no standing audit and risk committee, and no internal audit capability worth noting,” Macpherson said.
The bid evaluation process was “deeply flawed,” with missing or vague meeting records and irregular committee membership.
“People sat on those committees that were not entitled to sit on them and also bid scores were not properly documented. Price negotiations were not transparent,” Macpherson said.
“In one example… The Department of Health’s budget was R216 million but when the IDT issued the RFQ prices ballooned to over R590 million without a single documented approval or value for money assessment being produced.”
While donor funding from the Global Fund was preserved, Macpherson noted that the IDT had already spent R13.5 million on a professional service provider before the project was transferred to the Development Bank of Southern Africa (DBSA).
“The only money that was paid was around R13.5 million to the PSP for the initial work done,” he said.
“I think it’s by God’s grace that we did intervene at the time that we did. If we had risked that and allowed that money to be paid, the Global Fund may not be funding any of our health programmes now.”
Macpherson also confirmed that Cabinet appointed a new full-term board for the IDT in July, ending more than a year of instability.
The board is chaired by Zimbini Hill, who, Macpherson said, had “endured the most horrific, sexist and racist attacks—often supported by political parties.”
“She has not relented once but has bravely stood up to these bullies head-on. I expect this from each member of the board,” he said.
“We are not just reacting to a scandal. We are using it as an opportunity to get things right in our entities and our department.”
Macpherson revealed that his office had been the target of a coordinated disinformation campaign following the launch of the investigation.
“Fabricated call logs were published. AI-generated voice notes were circulated online. Anonymous whistleblowers released baseless allegations against me and my office,” he said.
“Fake news articles were published. This campaign against me and my team was amplified by political parties including the EFF and ActionSA.”
“Every time we act against wrongdoing in the department, there is a chorus of voices to defend that wrongdoing and maintain the status quo. What I did—and what I will continue to do—is to demand accountability.”
He ended the briefing with a firm commitment to transparency, reform, and restoring public trust.
“This is not the end of our cleanup, but it is one part of a difficult but necessary process that we are committed to—and we will complete,” he said.
“If we look the other way when procurement is manipulated, we erode public trust. And if we fail to act when evidence of wrongdoing is placed before us, we are ourselves complicit.
“This is about the kind of state that we are building. And today gives expression to priority three of the Medium-Term Development Plan: to build a capable, ethical and developmental state. Anyone who opposes what we are doing here today, in fact, opposes this very principle.”
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