R836m Oxygen Plant Tender Irregularities in South Africa

South Africa’s public procurement system has once again come under scrutiny, following revelations of large-scale fraud and mismanagement in the R836 million oxygen plant tender. The Independent Development Trust (IDT), tasked with installing oxygen plants at hospitals nationwide, has been implicated in widespread irregularities^[1].

Background

The project was originally budgeted at R216 million, intended to deliver much-needed Pressure Swing Adsorption (PSA) oxygen plants to public hospitals. However, costs ballooned to over R836 million, with R528 million allocated directly to IDT^[2].

Forensic Findings

A PwC forensic investigation, commissioned by Public Works Minister Dean Macpherson and released on 29 July 2025, exposed severe governance and compliance failures^[3]:

• Fraudulent licensing: Contractors submitted invalid or misrepresented SAHPRA licenses, with one company using another firm’s license without permission^[4].
• Irregular tender process: SAHPRA requirements were removed from the final RFP, enabling ineligible bidders to secure multimillion-rand contracts^[2].
• Budget escalation: Costs surged from R216m to R836m with no proper approvals or value-for-money checks^[3].
• “Ghost” contractors: A key contractor awarded R428m had no physical office, website, or valid contact details^[1].
• Procurement failures: Missing documentation, poorly constituted bid committees, and undocumented bid scoring were uncovered^[2].

Accountability Measures

Minister Macpherson described the findings as a “monumental failure in governance.” Recommended actions include^[3]:

• Disciplinary steps against IDT executives, including CEO Tebogo Malaka.
• Referrals to the Hawks, SIU, SAPS, and the NPA for possible criminal prosecution^[1].
• Appointment of a new IDT board chaired by Zimbini Hill^[4].
• Transfer of project implementation to the Development Bank of Southern Africa (DBSA) to safeguard donor funds^[5].

Broader Implications

This scandal highlights systemic weaknesses in South Africa’s procurement system and underscores the need for urgent reforms. Stronger auditing, transparent governance, and capacity building are essential to prevent further abuses. The case also demonstrates the vital role of investigative journalism and whistleblowers in uncovering corruption^[1].

Key Facts at a Glance

The R836m oxygen plant tender scandal is a reminder that transparency and accountability are essential in public procurement. Without them, South Africa risks eroding public trust and wasting critical resources intended to strengthen healthcare delivery.