Health Minister Welcomes Probe Findings on R836M Oxygen Plant Tender Scandal

In a major development for public sector accountability and healthcare integrity, South Africa’s Minister of Health, Dr. Aaron Motsoaledi, has welcomed the findings of a forensic investigation into the controversial R836 million Pressure Swing Adsorption (PSA) oxygen plant tender, which was meant to bolster oxygen supply infrastructure across 60 hospitals during the COVID-19 crisis.

The forensic report, compiled by PricewaterhouseCoopers (PwC) and released on July 30, 2025, by Minister of Public Works and Infrastructure Dean Macpherson, has revealed widespread procurement irregularities, governance failures, and potential fraud in the tender’s execution by the Independent Development Trust (IDT).

The Tender That Was Meant to Save Lives

Initially budgeted at R216 million, the PSA oxygen plant project was intended to deliver life-saving oxygen supply systems to public hospitals severely strained during the COVID-19 pandemic. These PSA plants, critical in generating medical-grade oxygen, were seen as essential for pandemic preparedness and long-term resilience in public healthcare.

In 2021, R528 million of the total allocation was directed to the IDT—a public entity under the Department of Public Works and Infrastructure (DPWI)—to implement the project. However, the project soon became embroiled in controversy after revelations of irregularities in the award process, leading to a formal forensic probe.

Forensic Report Exposes Deep Irregularities

The PwC investigation was prompted by a 2024 admission by the IDT that two of the three awarded companies did not possess valid registration with the South African Health Products Regulatory Authority (SAHPRA), a requirement for delivering medical-grade oxygen infrastructure. Furthermore, evidence surfaced that one company may have submitted fraudulent documents.

The report uncovered:

• Inflated project costs: Despite the Department of Health budgeting R216 million, the IDT’s Request for Quotation (RFQ) inexplicably inflated costs to over R590 million, without documented approval or a value-for-money assessment.

• Non-compliant suppliers: Two companies lacked SAHPRA registration.

• Procedural violations: Systemic lapses in procurement oversight, including failures in documentation and contractor vetting.

• Potential fraudulent submissions: At least one company is under suspicion for using falsified documentation.

Named Officials and Disciplinary Recommendations

The report recommends disciplinary action against several senior IDT officials, including:

• Tebogo Malaka, CEO of the IDT

• Dr. Molebedi Sisi, General Manager for Supply Chain Management

• Additional officials across IDT’s procurement and implementation units

In response, Minister Macpherson has already taken decisive steps by:

• Informing the Hawks (South Africa’s Directorate for Priority Crime Investigation)

• Briefing Minister Motsoaledi

• Engaging the newly constituted IDT board to initiate consequence management

Health Department’s Swift Action to Safeguard the Project

Minister Motsoaledi expressed relief and satisfaction with the report, stating that “the cloud hanging over the tender” has been lifted. He commended the forensic investigation for exonerating the Department of Health from any financial wrongdoing and reaffirmed that no Global Fund resources were lost.

Motsoaledi emphasized:

“They did not just commit financial corruption, but deprived South Africans of urgent life support in the form of oxygen. The law must take its course.”

Upon initial reports of potential corruption, both Ministers—Motsoaledi and Macpherson—had jointly decided to reassign the project from the embattled IDT to the Development Bank of Southern Africa (DBSA). This strategic intervention, the Department of Health confirmed, ensured project continuity and the protection of international donor funds.

“It would have been a sad day if donor funds were to disappear under our watch,” said Motsoaledi, stressing that accountability was vital not just for internal integrity but for preserving trust with partners such as the Global Fund.

Moving Forward: Project Completion and Accountability

With the PwC report now public and institutional wrongdoing identified, the Department of Health announced that remaining project work under the DBSA will be expedited. The goal is to conclude installation of the PSA oxygen plants as soon as possible, ensuring that public hospitals are equipped to deal with current and future respiratory emergencies.

Motsoaledi concluded by reaffirming the Department’s commitment to transparency, service delivery, and donor accountability, stating:

“This chapter must close with justice served and the public reassured that government remains committed to health, integrity, and progress.”