Multi-Million Rand Tender Sparks Controversy Over ‘Ghost Company’

In an astonishing turn of events, 'ghost company' Bulkeng (Pty) Ltd, known more for its varied bids on government contracts than for any specific expertise, has landed an R428 million tender to roll out pressure swing adsorption (PSA) oxygen plants across state hospitals in South Africa. The contract, earmarked by The Global Fund for health projects, is part of an R836-million budget allocation for oxygen plants, including additional fees and maintenance costs.

The deal, signed off by the Director-General of the Department of Health (DoH), Dr. Sandile Buthelezi, is currently under the microscope due to allegations of irregularities and connections to a previous scandal involving an alleged kickback payment to Buthelezi. With hospitals such as Taung District Hospital in North West and Benedictine Hospital in KZN in the pipeline for upgrades, the focus has sharpened on the credentials and capacity of Bulkeng to deliver on these critical healthcare infrastructure needs.

'Ghost company' bags R428m oxygen plants tender for state hospitals https://t.co/cPOk9cXJF0

"Road works, laundry equipment, even mops and buckets… those are just a few of the products and services Bulkeng has tendered for over the years." pic.twitter.com/fMSSgT5L1J

— Louis Boshoff (@louisbos123) October 28, 2024

Controversy has ensued, stemming from Bulkeng's lack of accreditation with the South African Health Products Regulatory Authority (SAHPRA), a key requirement noted in the bid documents. Despite initial assurances from the Independent Development Trust (IDT) that Bulkeng possessed a valid SAHPRA certificate, SAHPRA confirmed that the company was not in their database. Subsequent claims of a partnership with a supposedly accredited entity named 'Brutas Atlas Copco Industrials South Africa' have added to the confusion, as no company by that name could be found in official records.

Bulkeng's evasive and low-profile demeanor has raised red flags, with their sole director, Emmanuel Nkosinathi Ndlovu, unreachable and the company itself exhibiting an absence of physical presence or online footprint – unusual for a business about to undertake such an extensive and technical project.

This saga also involves Maziya General Trading and On Site Gas Systems International, who have been awarded the remaining R152 million of the project. While On Site Gas Systems is SAHPRA licensed, its partner Maziya is not. Maziya has a history of controversy, including past government project issues and a fine for tender collusion by the Competition Commission.

In a perplexing financial twist, the DoH's original cost analysis for this project priced it at a mere R256 million, inclusive of a three-year maintenance plan – starkly contrasting the now approved budget. The IDT and DoH cite "price escalations" and additional costs as reasons for the fourfold increase, yet this explanation does not seem to quell the concerns.

The discrepancies and questions swirling around the appointment of Bulkeng and the inflated costings place the DoH and the IDT at the heart of a brewing storm, where transparency and accountability in the use of public funds for crucial healthcare services stand jeopardized.