R15 Billion Tender for ARV Supply: Concerns Over Collusion

The Economic Freedom Fighters (EFF) notes, with grave concern, the R15 Billion tender for ARV supply by the National Department of Health. This follows concerns over allegations of collusion between certain suppliers, and the fact that the National Department of Health through the guidance of National Treasury, halted the previous contracts due to similar allegations, and instituted a new process which now reveals similar concerns.

In the previous process that resulted in contracts being halted with companies like Hetero, Treasury intervention included probes on the National Department of Health assessing financial capacity and manufacturing ability to supply. This concern primarily arose due to the low prices on offer by Hetero. However, in the new bidding process, the Department in the PC for Health Committee affirmed that a financial evaluation was not done to ascertain capacity on the two new suppliers who then received the tender for ARV medication (Barrs and Inovata). Furthermore, the price collusion concerns raised in the previous bidding process were not adequately responded to in the new tender contract. This particularly raises red flags as it alludes to lack of principle and consistency on the part of the National Department of Health.

It is a reality that days following the awarding of the R15 Billion tender to Barrs and Inovata, the two companies then went on business rescue, following which Hetero coincidentally came to the rescue. The National Department of Health claims to not have conducted financial evaluation in the tendering process, which rightfully raises an alarm on corrupt processes having unfolded. The Director General, who is the last line of signatory in the tender, failed to conduct due diligence in ensuring that the tender is given to companies that have capacity to manufacture, and the financial muscle to sustain manufacturing.

The EFF calls on the Competition Commission to expand its scope in the investigation and to include the two new supplying companies, Barrs and Inovata which are owned by one individual under the Avacare Health Group. The EFF further calls on the Special Investigating Unit to probe the R15 billion ARV Tender which is characterised by irregularities, which include but are not limited to; granting of the tender to two companies owned by one person who on the product have a R1 price difference. This is a pivotal aspect as the previous tenders were cancelled on accusation of price collusion amongst others. The EFF further calls on the Minister to ensure that the tender process is started afresh to protect the dignity of the department that always makes the news for tender corruption..

We have not forgotten about Digital Vibes. We have not forgotten about the Thembisa Hospital Heist. We have not forgotten about the Covid-19 PPE scandals and the hundreds of infrastructural projects by the department that are found wanting when interrogated. Failure of the Minister to take action against officials who are sleeping on the job rightfully calls for the Minister to be taken to task for his failure as the Executive responsible to oversee the department.

Lastly, the EFF calls on the Department to prioritise building state capacity. Since 2014, the EFF has continuously warned the state and the department that failing to build state capacity and a functional state pharmaceutical company will result in the health prospects of our nation being compromised. On an annual basis, this assertion is proven to be correct. Our state continues to be a toy that is taken advantage of by the private sector and tender tycoons, while our people’s lives are compromised in the process.

Critics argue that the EFF’s policies could lead to economic instability.

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