Far East Rand hospital allegedly gave tender to firm that inflated price by 190%

The alarming depth of Covid-19 funding corruption at Gauteng hospitals has once again been highlighted by a staggering 190% price inflation in a tender awarded to build coronavirus-screening facilities.

Zabelo Trading received a contract in June to build tents and partitions for Covid-19 screening at the Far East Rand Hospital (FERH) in Ekurhuleni, after the company had submitted the lowest quote of R139 126.25 during the bidding phase.

The two losing bids had quoted R219000 and R520080.

However, last month the company said it had under-quoted in June, and revised its price with a new invoice of R404190, which was approved on July 1 by the hospital's chief executive, Dr Zacharia Mathaba.

This information is contained in internal hospital documents, which The Star has seen.

The revelations come in the wake of a series of explosive reports from The Star’s sister publication, The Sunday Independent, which unearthed alleged multimillion-rand Covid-19 corruption in Gauteng involving presidential spokesperson Khusela Diko, Joburg mayoral committee member Loyiso Masuku and her husband, Gauteng Health MEC Bandile Masuku.

Highly-placed sources, who asked to remain anonymous, at FERH blamed the chief executive for alleged tender irregularities, saying Mathaba had allowed prices to be hiked.

“Procedurally, this is how they should conduct bidding for a tender: after they had appointed a company they must file all these documents, including the quotation from the winning company, the second and third best.

“However, hardly a month after Zabelo Trading won the bid, it came back and claimed to have under-quoted. And instead of cancelling their contract and awarding the second-best company, or starting the bidding process afresh, the chief executive allowed them to submit a new quote,” said a source.

The company's owner, Zabelo Mndawe, declined to comment, saying: “I don't want to undermine you, but I would rather not comment.”

Speaking on behalf of the hospital and its chief executive, Gauteng Health Department spokesperson Philani Mhlungu rejected claims of corruption at the hospital, adding that Mathaba was not involved in procurement processes, and that a central database was used to source potential service providers.

Mhlungu said suppliers had submitted their respective quotes, which were sent to the hospital's vetting committee for bid evaluation and recommendation of a preferred service provider.

“The chief executive of FERH vehemently denies allegations of price inflation and corruption in the procurement of tents and partitions for Covid-19 screening. These allegations are frivolous and malicious.

“Supply chain management expanded the scope of the services and requested all companies that had initially quoted to revise their quotes. These companies were requested to visit Tembisa Hospital to benchmark the type of tent the end user was looking for.

“Subsequent to the visit to Tembisa, these companies revised their quotes appropriately,” Mhlungu said.

However, sources rejected Mhlungu’s contention, saying Zabelo had not revised its specifications between June and the last month.

Insiders conceded to not knowing how Zabelo was tied to hospital management, if at all, but accused Mathaba of flagrantly misusing taxpayers' money.

The assertions appear to be supported by specifications contained in Zabelo’s invoice sheet, which The Star has seen, dated June 17 (R139126.25) and July 15 (R404 190), which are carbon copies of each other.

There were no updated specifications on the July invoice, as contended by the provincial department.

But Mhlungu maintained that the vetting committee evaluated the revised quotes and recommended Zabelo “on the basis of the price preference calculation score”, which the chief executive approved.

Last year The Star reported that Mathaba was appointed CEO of Far East Rand while still having still undergoing disciplinary action for gross dishonesty.

This was after he allegedly claimed overtime he allegedly did not do between September 1 2017 to 2018 year as well as from April 1 2018 to March 31 2019.