The notorious Eastern Cape health department is having an internal turmoil over head of department Dr Rolene Wagner, who is pushing to process R100-million of the R200 million to a private company for a disputed settlement.
So determined is Wagner to make the payment she has since fallen out with department acting CFO Gcinikhaya Mhlanga, who, along with all procurement officials, is refusing to rubber stamp the payment.
It took MEC Ntandokazi Capa to intervene to stop the spirited Wagner, the most senior and the longest-serving official in the department having started in 2021 from bulldozing her subordinates.
Capa has since called for the SIU to investigate the saga.
The drama relates to a public private partnership (PPP) agreement the department entered into with Nalithemba Pty Ltd in 2007 for construction of Settlers and Port Alfred Hospitals. The entity was also expected to commission various items of equipment, manage the facilities and provide services for private patients.
However, due to the financial constraints, the department prematurely terminated the PPP agreement on November 9, 2020, following an order of the High Court on November 3, 2020. But Nalithemba was having none of their nonsense, and dragged the department to court in 2021, a lawsuit it did not defend. Nalithemba got a default judgment, but the two parties, through Wagner, reached a settlement agreement this year.
Sunday World has seen a string of written communications where Wagner is giving “instructions” to Mhlanga to process R100-million to Nalithemba despite many disputed issues surrounding the PPP.
Frustrated subordinates of Wagner have described her push for the payment as a move that will cripple an already financially limping department of health troubled by ridiculously high medico-legal claims.
Wagner confirmed to Sunday World that she has been pressuring the CFO but said this was to protect movable assets of the department from being attached and the MEC from being arrested for contempt of court.
“The MEC, on discovering this, as the executive authority, requested to be appraised with this Nalithemba matter, as the alleged matter occurred in 2007.
“The MEC requested detailed information in the form of a memorandum with all the attachments as it is standard practice in terms of governance in government,” said departmental spokesperson Siyanda Manana.
“The MEC requested an investigation into the matter and requested that this matter must be investigated by the SIU.
“The integrity of the SIU is above reproach, and their findings would thus bring credence to the process. The MEC stands firm on zero tolerance for any corruption and any allegations will be investigated to establish the facts on the matter. The department has requested the
National Treasury’s legal team to advise on the matter.”
On Monday, Wagner was still pushing the CFO to pay Nalithemba. “You are therefore hereby instructed, once more in terms of section 38(1)(f) of the PFMA, to ensure that the cash remains in place for payment of Nalithemba, as per the cash flow submission to Treasury that accommodates this transaction in the month of April 2025,” Wagner wrote in a letter to the CFO on April 21.
“Should you fail to implement the above instruction, your attention is, amongst other things, drawn to the provisions of Treasury Regulation 12.7.1 for any losses that the department may suffer due to the failure to comply with the terms of the settlement agreement.”
Six days prior, Wagner had threatened the CFO when she said that “attempts to delay the payment will accordingly be regarded as insubordination and will constitute serious misconduct”.
The R100-million is but the first payment in six tranches totalling more than R200-million, with R22-million monthly payments having been scheduled for the next five months.
Manana said Wagner acknowledges that there are disagreements about the services provided and paid for.
“The dilemma, of course, is that these actions (SIU and National Treasury involvement) do not preclude that there is a long-standing judgment against the department and that an agreement had to be reached to comply with the court order and prevent the dire consequences of the assets and bank account being attached.”
The R100-million Wagner wants paid to Nalithemba has been redirected from the district health services expenditure item and will affect the interests of patients.
The department is also in the red for more than R6-billion, due to medico-legal claims emanating from medical negligence. It also received a qualified audit opinion from the Auditor-General, mostly due to these claims.
