The Independent Development Trust (IDT) CEO Tebogo Malaka and general manager for supply chain management Molebedi Sisi are facing disciplinary action over the R800-million PSA Oxygen Plant tender.
Public Works and Infrastructure (DPWI) Minister Dean Macpherson released a report on the IDT crisis on Tuesday.
This report reveals extensive procurement irregularities, fraud, and governance failures at the IDT. And it has recommended disciplinary action against Malaka, Sisi. This includes a number of other officials implicated in the flawed tender processes.
Ignored red flags raised by department
Malaka is found to have failed to exercise oversight, relying solely on internal supply chain assurances, disregarding red flags raised by the Department of Health, and for failing to convene appropriate risk and governance structures.
Sisi was found to have misled internal stakeholders by insisting the procurement process was sound. This is despite the absence of critical regulatory requirements.
“From the moment I stepped into this role, I was already aware of long-standing and serious allegations of maladministration, financial misconduct, and corruption at the Independent Development Trust. Those concerns have haunted the IDT for a number of years,” said Macpherson.
He said that incomplete projects, tender irregularities, and repeated audit disclaimers had long tarnished the IDT’s credibility. They had eroded confidence across government and society.
Macpherson said the PSA Oxygen Plant project, valued at over R836-million, was meant to deliver lifesaving Pressure Swing Adsorption Oxygen Plants to 60 hospitals across South Africa.
Of this amount, R528-million was allocated directly to the IDT to manage and implement the roll-out.
No SAHPRA registration
Macpherson explained that concerns were raised in October 2024 after a media exposé revealed that a company awarded more than R400-million under the project lacked proper medical product registration with the SA Health Products Authority (SAHPRA) and appeared to be a ghost entity.
“On learning of these claims, I immediately demanded answers from the IDT board at the time. On 29 October 2024, I requested full documentation from the IDT. This is including the contracts, evaluation committee minutes, SAHPRA certificates, and due diligence reports. What I received was inadequate and incomplete. And a backwards and forwards exchange of letters ensued, initially with the IDT denying there were problems with the tender.
“On 1 November 2024, I called for the board to consider suspending the tender, which they initially did not support. And then finally, in December 2024, they admitted there may have been a problem with the tender,” said Macpherson.
He said when the Department of Health announced its intention to withdraw the PSA project from the IDT with the purpose of giving it to the Development Bank of South Africa, the IDT was already in a governance crisis and short of trustees to legally function.
Independent forensic investigation
Macpherson said he had no choice but to institute an independent forensic investigation.
On January 15, he said, the DPWI appointed an external advisory firm to carry out a full investigation. This with a mandate to examine allegations of fraud, maladministration, and non-compliance with regulatory requirements.
The forensic report reveals that multiple companies were awarded contracts despite lacking the required SAHPRA licenses. One company called Bulkeng is found to have fraudulently submitted an SAHPRA license. The license belongs to another company called Atlas Copco Industrial SA. It was submitted without Atlas Copco’s knowledge or consent.
Bulkeng was awarded a contract worth R428-million. And Macpherson said this is more than double the maximum value allowed under its CIDB grading.
“The SAHPRA compliance requirement — originally stipulated in the Project Execution Plan and the Department of Health’s Memorandum of Agreement — was deliberately removed from the final Request for Proposals. This opened the door for ineligible bidders to participate and win massive contracts.
Series of irregularities
“Meeting minutes were missing or incomplete, which is shocking, but not surprising.
Committee appointments were not properly constituted. Bid scores were not properly documented, and price negotiations were not transparent. In one example, the original Department of Health budget was R216-million. But when the IDT issued the RFQ, prices ballooned to over R590-million. This was done without a single documented approval or value-for-money assessment,” said Macpherson.
The report further recommends that Malaka and Sisi be held accountable through disciplinary processes. It calls for similar action against other implicated IDT officials.
It also advises improvements in training, recordkeeping, and compliance with procurement regulations. Particularly regarding CIDB grading and bid evaluation procedures.
Macpherson said the full report has been submitted to the Hawks to assist in their ongoing criminal investigation.
“I have briefed the Minister of Health, who has been incredibly supportive during this time. And I wish to extend my gratitude to him. I have formally briefed the newly constituted IDT board on the contents of this report at a meeting held early today in Pretoria. Accountability must follow, and will follow,” said Macpherson.
