Coega sues Bhisho for R149m in fees

Claims of improper conduct by official of health department

The Coega Development Corporation (CDC) is suing the Eastern Cape Department of Health for R149-million in fees for work it has done for Bhisho, alleging that the money was withheld because it refused to bend tender regulations.

The dispute, according to the CDC, has led to project delays and ultimately disadvantaged communities who require health infrastructure to improve their lives.

As an implementing agent for the Department of Health, the CDC is responsible for project management of healthcare infrastructure planning, development and facilities management in Nelson Mandela Bay and elsewhere in the province.

One of the CDC’s main allegations is that the urgency of work was fabricated to bypass regulations and issue emergency tenders to preferred service providers.

But the department has hit back, saying it is being dragged into corruption allegations without substantiation.

The CDC has named the department’s senior director of infrastructure, Mlamli Tuswa, as the central figure behind the alleged decision to withhold fees and has accused him of having a corrupt relationship with one of the corporation’s own officials, Babini Melitafa.

“The debt relates to fees billed by the CDC for services rendered,” CDC spokesman Dr Ayanda Vilakazi said.

“There has been direct interference and improper conduct by Tuswa, aimed at frustrating the CDC in doing its duties.”

Vilakazi alleged that the CDC had learnt that the money was being withheld in an effort to force it to only use certain service providers favoured by the department.

“The fees for the work completed by the CDC have not been paid, allegedly to frustrate the CDC because the organisation has not been bending to [Tuswa’s] wishes to improperly benefit or privilege certain service providers without due process,” Vilakazi said. Tuswa was unfazed. “Let the CDC publish what they consider to be factual,” he said.

“When they are done with their blackmailing agenda, I will provide you with the full details.”

Vilakazi said they had tried, to no avail, to resolve the issue with the department and had consequently resorted to legal action.

“We have served the department with a legal letter of demand and instituted legal action to recover the debt,” he said.

In a special presentation to the portfolio committee for health in the Eastern Cape legislature, the CDC set out how it had arrived at the figure of R149-million and why it believed its relationship with the department had broken down.

Vilakazi said that in April last year they had discovered that several service providers for the health department were appointed in an allegedly fraudulent and illegal manner.

He said it had been found that at the root of difficult and unreasonable requests from Tuswa was an alleged “corrupt and conspicuous relationship” between Tuswa and Melitafa.

“The CDC was placed in a very difficult position and the timely completion of the department of health’s projects became practically impossible,” Vilakazi said.

“Requests were received at the last minute with the sole intention of frustrating the CDC and to force it to default on its obligations.”

He said these urgent requests were designed to force the CDC to appoint certain service providers without due process.

“This is tantamount to corruption and fraud,” Vilakazi said.

Health department spokesman Sizwe Kupelo said they were being hamstrung by the CDC in their investigations.

“The CDC indicated to the department of health that there was a report pointing to corruption implicating one of our senior managers,” he said.

“However, they refused to give that report to the department.

“It was never shared with us. We only received a verbal indication. “Subsequent to those engagements, a decision was taken that the Eastern Cape Treasury would conduct a forensic investigation of the allegations raised by Coega.

“We understand that the report contains a series of allegations against the department and the senior official.”

Kupelo said the forensic report compiled by the treasury could not substantiate all of the CDC’s allegations.

“There are some findings that need a response from the official involved,” he said.

They were also disputing some of the amounts claimed by the CDC, but the corporation had decided not to participate in the verification process.

“We are willing to pay – but not to pay an unverified R149-million.”

Vilakazi said the wrangle was affecting communities.

“The CDC was denied permission to continue with certain projects, such as the community health centres, which the department wanted transferred back to them due to the current unresolved matter, thus negatively impacting the communities who are in urgent need of these services.

“These projects are therefore not likely to be completed this financial year.”

He said 30 projects, including four health centres and six hospital projects, had been delayed by the dispute.

“These are in the planning phase and should proceed to procurement and then construction but the department wanted these back from the CDC, and as a result their implementation has been delayed.

“There are also 20 other projects in the planning phase which have been delayed.

“The CDC has not refused to implement projects under management, but there is nothing it can do if the department wishes these projects to be returned.”

The CDC had completed projects that were still under its control.

“We owe it to our citizens to minimise the negative impact of the dispute.

“It is our wish that the matters could still be resolved amicably so that we could continue assisting the department to deliver the much-needed infrastructure to improve the health status of our citizens.”

Melitafa said he would comment later.

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