The Gauteng Department of Health has received a warning regarding "South Africa's procurement system that remains wide open to exploitation by fly-by-night companies." This comes after the department acknowledged that it lacks the power to put suppliers connected to the R2 billion Tembisa Hospital scandal on a blacklist.
This warning comes after ActionSA MP Kgosi Letlape made the shocking discovery that the government still permits the embezzlement of public funds through formal parliamentary responses from the Minister of Health on October 10. In the scandal, 207 service providers were accused of embezzling taxpayer funds without consequence.
In a written reply, Health Minister Aaron Motsoaledi outlined steps taken following the Special Investigating Unit (SIU) interim report, including high-level meetings with senior management, the National Health Council (NHC), and CEOs and CFOs of central hospitals to discuss ways to prevent future corruption.
A workshop is also scheduled for 27–28 November to develop stronger safeguards.
Motsoaledi explained that the NHC requested the SIU to blacklist all companies involved in the syndicate. However, only the National Treasury has the authority to blacklist suppliers.
“In the meantime, SIU has been asked to submit to provinces the list of such companies so that even if there is no blacklisting, yet the HODs pay special due diligence and investigations before they finalise award to such companies if bid adjudication committees have recommended them.” Motsoaledi said.
He also highlighted the role of the Health Sector Anti-Corruption Forum and anti-corruption hotlines in protecting whistleblowers.
Letlape expressed deep concern over the ongoing exploitation of South Africa’s procurement system. He said the findings reveal entrenched rot that continues to cripple public accountability.
“It is deeply alarming that, despite the SIU’s report revealing how more than R2 billion was siphoned from Tembisa Hospital through 207 service providers and over 4 500 purchase orders, our procurement system remains wide open to exploitation for fly-by-night companies,” Letlape said.
He added that many of the companies flagged by the SIU were registered just days or weeks before receiving multimillion-rand tenders, without operational history, tax compliance, or proof of prior delivery.
“These revelations expose deep flaws in South Africa’s procurement system, letting inexperienced companies win lucrative tenders and even allowing corrupt firms to keep doing business with the state,” he said.
Letlape condemned the government’s inaction, saying the SIU’s recommendations have largely been ignored, allowing corrupt companies and individuals to continue trading.
“Motsoaledi’s replies show that even after the SIU exposed these criminal networks and recommended blacklisting, no decisive action has been taken to stop them. The Department of Health admits it cannot blacklist suppliers, that power lies solely with the National Treasury. This loophole lets those under investigation continue trading while ‘awaiting’ Treasury action,” he said.
He also highlighted a shocking accountability failure: out of 467 individuals and companies recommended for the Restricted Suppliers Register, only one has been listed. This breakdown in consequence management fuels impunity and erodes public trust.
Letlape warned that systemic weaknesses, outdated systems, and poor coordination create fertile ground for recurring corruption.
“Until the government implements a transparent, centralised vetting system that flags, suspends, and blacklists companies under investigation, procurement abuse will continue unchecked. Legislative reform is urgently needed to prevent shell companies from exploiting tenders and to ensure individuals linked to corruption are permanently barred from public contracts,” he said.
The Star
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