R28m paid for failed North West hospital project
Four years after a North West company was awarded a R28m health department contract to build a new 120-bed facility at General De La Rey Hospital in Lichtenburg, the deteriorating hospital remains untouched.
According to a source within the department who spoke to the Sunday Times, MIB Infrastructure received an overpayment of R21m and now faces allegations it secured the tender with allegedly fraudulent documents.
The payment covered fees for design development, documentation, procurement, construction supervision and project close-out — but the firm only delivered initial concept designs and inception services valued at R6.9m.
“Nobody knows why the department paid the R21m, which included supervision of construction despite no construction having taken place. MIB is favoured by certain officials, and payments are channelled to this company,” said the insider.
The company, through its director Malesenyo Ramaoka, maintains that the funds were legitimately earned for professional services rendered, claiming a substantial revision to the project’s scope meant that the team re-evaluated and modified their initial planning and design proposals.
“The amount referred to relates to professional services rendered by MIB Infrastructure in connection with the planning and design for the upgrading of General De La Rey Hospital. It should therefore not be interpreted as payment for construction works undertaken by MIB Infrastructure,” said Ramaoka.
The hospital is unable to admit patients and has to check if neighbouring hospitals such as Lehurutshe do not have spare capacity to take additional patients from General De La Rey. In some cases patients lose their lives while waiting for beds somewhere else.
“It is also important to clarify that the estimated project construction cost evolved during the planning and design process from stage 1 through stage 3 as the scope, design requirements and associated infrastructure requirements became progressively better defined.”
Earlier this year the North West High Court, sitting in Mahikeng, declared the appointment of MIB Infrastructure unlawful, set aside the tender and ordered that Bagale Consulting be appointed.
An on-site visit by the Sunday Times this week revealed no signs of construction activity since MIB’s 2022 appointment, notwithstanding the millions of rands already paid to the firm.
The hospital’s CEO, Gaborone Seleke, informed health department officials on September 4 about the severe strain the facility faces in providing health care services across the Ditsobotla District.
“The hospital is unable to admit patients and has to check if neighbouring hospitals such as Lehurutshe do not have spare capacity to take additional patients from General De La Rey. In some cases patients lose their lives while waiting for beds somewhere else,” said Seleke.
In a startling development, architect Tafadzwa Mtisi sent an e-mail to the health department alleging that MIB Infrastructure fraudulently used his professional credentials without his knowledge or consent to secure the tender.
“I further note that the certificate relied upon in the submission had expired at the time, and that this formed part of the basis upon which the tender appointment was set aside,” Mtisi said. “I have since submitted a formal complaint to the South African Council for the Architectural Profession, and I am taking steps to formally clarify my non-involvement and protect my professional standing.”
Ramaoka said MIB had only intended to use Mtisi’s credentials as an additional member of the professional team.
“Following the award, MIB Infrastructure was unable to conclude an agreement with Mr Mtisi for his participation in the project,” said Ramaoka.
“He was subsequently replaced by another appropriately qualified professional with comparable experience to enable the project to proceed. In relation to the specific allegation that Mr Mtisi’s professional certificate was used fraudulently to secure the appointment, MIB would caution against reaching such a conclusion without establishing the relevant facts.”
According to Tebogo Lekgethwane, spokesperson for the North West health department, officials are aware of Mtisi’s claims and have directed him to submit a Promotion of Access to Information Act request so they can verify the facts.
“It would therefore be premature for the department to make definitive findings regarding the alleged fraudulent use of Mr Mtisi’s credentials without first establishing the relevant facts,” said Lekgethwane. “Once the relevant documentation has been properly obtained and considered, the department will be in a position to assess the allegations, engage the affected parties for their response and determine what further steps, if any, are warranted. Any action by the department will be informed by the outcome of the fact-finding process and independent legal advice.”
However, the department failed to explain the R28m payment to MIB.
“With regard to the approximately R28m referred to in the inquiry, the department is aware of the questions concerning payments made under the contract,” said Lekgethwane.
“The fact that a court has found the appointment unlawful does not, in itself, provide a basis for the department to make an unsubstantiated assertion regarding recovery. The question of any financial recovery and the appropriate legal mechanisms to pursue such recovery will be considered on the basis of the relevant contractual, factual and legal position.”
The health department was taken to court over MIB’s appointment by Bagale Consulting, which won the case.
Bagale was appointed in 2008 as project manager for the construction of Lichtenburg Hospital, intended to replace General De la Rey Hospital and serve patients from the decommissioned Thusong Hospital.
However, in 2022, the health department hired MIB Infrastructure for a similar project. The primary distinction between the two contracts was the number of beds in the new facility: Bagale’s contract specified 150 beds, while MIB’s contract was for 120 beds.
