The Limpopo health department is to spend R50-million a month on a depot tender in Limpopo – a move that could throw the provincial department into financial ruins.
This comes after the head honchos at Bophelong, the provincial headquarters in Polokwane, decided to outsource the dilapidated complex to a private company, allegedly to the tune of R50-million a month.
Prior to the privatisation, the department was understandably spending R4-million. Now it must fork out R50-million each month through this controversial tender. Neil Shikwambana, the departmental spokesperson, confirmed the privatisation, adding that the service provider would relocate the pharmaceutical services from Seshego industrial site to Polokwane.
Shikwambana said apart from the staggering depot expenditure, the department was spending R140-million on medicines in a space of three months.
“The incoming private company will provide, among other services, IT systems, delivery of medications, security and warehouse management systems.
“We want to strengthen the capacity and work on modern technologies. The department is moving with time and therefore its critical services cannot be stuck in an old, dilapidated building.”
The depot has been plunged into further disarray after the Medical Control Council withdrew its licence to repackage medicines. MEC Dr Phophi Ramathuba said the decision to withdraw the repackaging licence was taken after the ageing warehouse was assessed and found wanting. This figure is contained in a 2021 bid document calling upon service providers to rescue the pharmaceutical depot from the depths of intensive care.
Situated in the outskirts of Seshego township, just outside Polokwane, the run-down building is owned by the Limpopo Economic Development Agency (LEDA). It is understood the health department paid a monthly rental fee of R200 000 without a lease agreement. LEDA has been accused of not taking care of the warehouse as the landlord. Apart from the complex being a health hazard, the institution has been experiencing shortages of medical supplies to the province’s 41 hospitals and 428 clinics.
Due to a persistent shortage of medicines, patients have been complaining that “the government health facilities have been limited in terms of the availability of prescription medicine”, and often patients must contend with “expired medical stock”.
The warehouse faced budget constraints, which meant waiting for the next financial year before the department could restock. The privatisation has triggered the anger of civil society, with the National Education, Health and Allied Workers Union (Nehawu) sounding the alarm about graft and possible job losses. The Conty Lebepe Foundation, an anti-corruption vanguard, has accused the department of gross malfeasance and a waste of taxpayers’ money.
The foundation chairman, Conty Lebepe said the privatisation of the depot has a huge potential to bankrupt the department. “Moving from about R5-million to a staggering figure of approximately R50-million per month is scary. The last time the province tried to outsource, the system created serious challenges, including high volumes of expired medicines and loss of jobs.
“We have written a letter to Premier Stan Mathabatha and have submitted evidence to law enforcement agencies,” said Lebepe.
Nehawu branch chairman Mamphye Motau said the privatisation of the depot would have dire consequences for the department and staff.
“The department should have learnt from its past mistakes when dealing with private companies. We had a case of expired medicines when Vuna Health Care and Amalgamated Medical were providing services here,” said Motau.
The tender was supposed to commence on April 1, 2024, but the process was brought forward to August 1, 2023.
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