Dean Macpherson Welcomes PwC Investigation into Oxygen Plant Tender

Independent probe to ensure accountability, transparency, and governance in public procurement processes.

Public Works and Infrastructure Minister Dean Macpherson has welcomed the appointment of PricewaterhouseCoopers (PwC) to investigate the circumstances surrounding the R800 million Oxygen Plant tender awarded by the Independent Development Trust (IDT). The move comes in response to concerns raised about irregularities in the tendering process, including allegations of fraud and non-compliance with regulatory standards.

The investigation follows IDT’s admission last year that three companies were awarded the tender, despite two lacking the necessary registration with the South African Health Products Regulatory Authority (SAHPRA). This has raised questions about the legality and fairness of the process, as well as the potential misuse of public funds.

Scope of the Investigation

According to the department, PwC’s independent probe is expected to be completed within eight weeks. The investigation will focus on key objectives, including:

• Examining the tender process: Determining whether proper procedures were followed in appointing external service providers.
• Identifying financial misconduct: Establishing whether irregular, fruitless, or wasteful expenditure was incurred during the tender administration.
• Evaluating legal compliance: Assessing whether IDT officials or external individuals violated laws or duties during the tender process or contract management.
• Quantifying financial losses: Determining the extent and value of financial losses incurred by the IDT in relation to the tender.
• Uncovering irregularities: Identifying illegal activity or irregular conduct involving IDT officials or external service providers.
• Recommending action: Proposing steps to hold responsible parties accountable where irregularities are confirmed.

Background of Allegations

The controversy stems from allegations made in 2023 about potential irregularities in awarding the Pressure Swing Adsorption (PSA) Oxygen Plant bids. Key concerns include claims that:

• Two companies lacked SAHPRA registration, a critical requirement for supplying medical-grade oxygen systems.
• One company may have submitted fraudulent documentation during the tender process.

The IDT’s own admission that concerns exist regarding the tender has heightened scrutiny, leading to calls for accountability and transparency in public procurement processes.

Minister Macpherson's Response

Minister Macpherson emphasized the importance of the investigation, noting that transparency and accountability are paramount in managing public funds. He stated, “This independent investigation is a crucial step in restoring public trust and ensuring the integrity of our procurement processes. We cannot turn a blind eye when serious allegations arise involving close to R1 billion of public money.”

The minister added that the department is committed to uncovering the truth and holding officials accountable. “As Minister, I am determined to ensure that public funds are used responsibly, and this investigation will play a vital role in achieving that goal,” he said.

Macpherson expressed confidence that the investigation would clear innocent individuals while holding guilty parties accountable. He emphasized that the probe is not only about addressing misconduct but also about rebuilding public confidence in the IDT’s operations.

Next Steps

The department has assured that any findings of misconduct will be acted upon decisively. “If irregularities or illegal actions are uncovered, those responsible will face the consequences, and measures will be put in place to prevent a recurrence of such issues,” Macpherson said.

The investigation’s outcome is expected to guide broader reforms within the department, particularly in ensuring compliance with regulatory frameworks and bolstering governance structures.

Minister Macpherson concluded, “The independent investigation should be welcomed as a vital tool in addressing misconduct, improving governance, and ensuring that public procurement serves the best interests of all South Africans.”

The public and stakeholders will be updated on the investigation’s findings and subsequent actions as they unfold.