The upgrades of 1 Military Hospital for R1m in Thaba Tshwane and the military hospitals in Bloemfontein and Cape Town (for R3m and R2m) have been dragging on since 2005.
Not a single one has been completed and yet the defence force is mum on allegations of wastage and corruption.
According to an earlier submission to the joint standing committee on defence, the defence force paid private hospitals R182m between 2010 and 2020 to provide services that should have been rendered by military services. The defence budget pins these expenses for the next two years until March 2022 on R261.7m and R708m respectively.
Shortly before the Covid pandemic struck, the SANDF and Development Bank of Southern Africa (DBSA) signed a memorandum of understanding to appoint the bank as the implementation agent sorting out the mess the hospitals found themselves in.
In effect the DBSA acted as middleman for three years, outsourcing the work for “agent fees” of R10m for each R150m spent. The defence force has to pay in advance for each project.
It did not help matters that the former surgeon-general, Lt-Gen Veejay Ramlakan, allegedly used a large amount of the hospital budget for a clinic, living quarters and helicopter landing pad at Nkandla.
It is believed the memorandum was recently extended to include the repairs and upgrading of all military buildings that are in need of such work for the next five years. On each occasion, the defence force transfers up to R300m to its account at the DBSA to pay for the contracts.
The defence force, meanwhile, has remained silent for years on the findings of a forensic investigation into wastage and other irregularities linked to the upgrading contracts. The joint standing committee on defence has tried in vain to get answers and there has been no response to repeated media requests.
There has been no effort to clarify how millions of rand have been spent, who benefited and if any money will be paid back.
General decay
According to the defence force’s version of events, the untenable situation regarding hospitals, other military buildings and general decay has its roots in a clash between the defence force and the department of public works over the upgrade of 1 Military Hospital in particular.
This eventually resulted in the defence force using its own works formation around 2015 to take over from the department of public works. The hospital, however, still didn't function properly. Trolleys did not fit through theatre doors and the oxygen was not of theatre standard. Despite reconstruction of the roof, leakages caused extensive damage. The sparring between the departments further detracted from the work at hand.
It did not help matters that the former surgeon-general, Lt-Gen Veejay Ramlakan, allegedly used a large amount of the hospital budget for a clinic, living quarters and helicopter landing pad at Nkandla.
Ramlakan, who ended up as the self-appointed project officer for all security installations at Nkandla, was booted out in 2017 by then head of the army Gen Solly Shoke because of his involvement in the Nkandla project.
Last year Ramlakan died of a heart attack, and Shoke retired at the end of last month.
Billions and billions
The taxpayer forked out billions of rand for these works. Completion of the project at R1m alone will cost a further R1.2bn.
The DBSA was involved because the defence force allegedly has no expertise left, despite having an entire Works Formation with personnel and equipment. The formation was created specifically to enable the defence force to carry out its own maintenance work, but now an additional entity is being used at further cost.
Last year, when Covid-19 broke out, the DBSA rushed in and within months completed a 40-bed ICU and 60-bed Covid isolation ward at 1 Mil at a cost of about R151m.
It was a vital project. Without it, the hospital could not provide any specialist care to military Covid patients. The unit has proper medical equipment and cares for about 50 patients.
The DBSA’s services do not come cheap. Out of the R151m spent, R11m was the bank’s “agency fees”. The work was awarded by closed tender to security construction company SA Fence & Gate. According to project documents the company used subcontractors as “professional agents”.
Fence & Gate has been implicated in controversial Prasa tenders, where tenders were either awarded irregularly or maintenance work was not completed.
In February GroundUp reported that adv Lindi Nkosi-Thomas ruled that SA Fence and Gate should pay R45.1m back to Prasa after it failed to supply and install lighting for that amount. Nkosi-Thomas was acting as an arbitrator in a dispute between the two companies. SA Fence & Gate is known for installing speciality fences at state enterprises.
In response to questions from Vrye Weekblad, DBSA spokesperson Desiree Mojanaga said the bank used a system of open and closed tenders depending on the projects. The bank used National Treasury guidelines, and closed tenders were awarded on the basis of a supplier’s credentials. She did not mention what Fence and Gate’s qualifications as hospital contractor were.
The defence force also did not clarify why it needed an implementation agent that subcontracted a professional agent or agents and where it left the Works Formation. The formation’s entire budget for facility maintenance is now being transferred to the DBSA.
The secretary of defence’s version of events
The most recent confirmation of the state of the upgrading projects has been provided by secretary of defence Sonto Kudjoe after the committee was left with more questions than answers.
The repair and maintenance programme that Public Works originally submitted to the defence force followed on the successful implementation of a similar programme at the departments of correctional services and constitutional development.
Between 2006 and 2009 a total of R860m was paid over to Public Works for the work. The R1m project was “completed” in 2011 after nearly R480m was spent. The remainder was mostly spent on the upgrading of 2 Mil.
Shortfalls in the ever-shrinking defence budget necessitated using funds otherwise meant for personnel.
There, were, however, considerable problems:
- Dysfunctional mechanical and electrical systems;
- Dysfunctional fire alarms and fire suppressant systems;
- The leaking roof caused considerable damage to medicines and equipment for medical procedures;
- The pharmacy and histology laboratory were inadequate and unfinished;
- Apparently no medical equipment was included in expenses calculations and will have to be procured at a further R600m;
- There were constant power outages, with backup generators not kicking in; and
- Drain pipes were damaged and water pipes rusty.
The defence force, therefore, decided in 2015 to discontinue the services of Public Works. It asked the CSIR for an overview of deficiencies, defects and essentials.
A private contractor was tasked with redesigning the first floor, including the pharmacy and laboratories. This process lasted another 20 months. Yet another private specialist contractor was appointed to decide what medical equipment was needed. These two contractors cost the defence force R51m.
In handing over from Public Works to the defence force a dispute started over contracts and unfinished work as well as nonpayments. The forensic investigation was launched to determine who owed what and to probe irregularities with the contracts.
Kudjoe insisted in her response that the investigation had been completed, but the Works Formation had not been informed of the outcome. She did not clarify why she, as the chief accounting officer for the department of defence, could not ask for the forensic report.
She did, however, confirm that the investigation brought all further work at the hospital to a halt. In the meantime, patients were being sent from pillar to post to find medical care.
According to Kudjoe, the Works Formation might only continue with projects once the findings had been considered. There was no indication of when that might be.
The outstanding report did not prevented Kudjoe’s predecessor, Dr Sam Gulube, from signing the agreement with the DBSA.
Because of the leaking roof, the new isolation floor installed by the DBSA was damaged in the last summer rains. The defence force had asked to take over the roof project, but Public Works refused.
Leaking roof a priority
“The department of defence might not be as lucky during the next rainy season because they don’t know how much damage was done during the last leakages. That is why it is urgent that the roof has to be fixed for once and for all,” warned Kudjoe.
In the same breath, she said the terrible condition of the defence force’s buildings in general meant a further R1.3bn was needed. Shortfalls in the ever-shrinking defence budget necessitated using funds otherwise meant for personnel.
As a result of this confusion, the department concluded an agreement with the DBSA to ensure a competent entity is appointed to maintain the buildings.
The memorandum of understanding further determined the DBSA would appoint and train unemployed and unskilled people in the repairs programme. In her response to Vrye Weekblad, Mojanaga said personnel training for the Works Formation would be a key consideration in the execution thereof.
The members of the Works Formation would, according to Mojanaga, be trained in select programmes using outside contractors, but that they would be deployed in subordinate roles to the contractors. What role senior officers and other experts in the formation would perform remains unclear.
The immediate priority for 1 Mil is the floor with the pharmacy and laboratories. The defence force has already paid the first instalment of R300m to the DBSA.
Mojanaga does note that the DBSA will only use Treasury-approved service providers. The bank’s books are audited by the auditor-general as is the case with the defence force. It remains an open question what the consequences will be if any irregularities occur again.
The DA’s Kobus Marais said the defence force was abdicating its responsibility for building maintenance to a civilian entity that had no understanding of the defence force environment. And, in the process, a parallel entity was being established at extra cost before the problems with the former department and divisions within the defence force had been addressed.
This article was first published in Vrye Weekblad.
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