Heads must roll for failed 1 Military Hospital revamp project: defence minister

Defence minister Thandi Modise has promised to leave no stone unturned in making people accountable for irregular expenditure of more than R156m for a failed repair and maintenance project at 1 Military Hospital at Thaba Tshwane in Pretoria.

“When the doors were locked, what did the head of service say? Was a report fielded and what was the response? When the budgets overran, what did the main budget holder say and who was keeping an eye on the rands and cents?

“If those officers are found guilty, they must be stripped (of their titles). If we don’t do that we will have a revolving door with people taking chances. We must put our foot down,” she said.  

On Thursday night Modise and her colleagues received a damning report from Abacus Financial Crime Advisory, a company that investigated the renovations at 1 Military Hospital.

Committee chair Cyril Xaba said the hospital was a shadow of its former self.

“This (hospital) was considered a jewel of the defence force at the time. It boasts 500 beds, a prime facility meant to provide treatment to the president, deputy and their predecessors, as well as members of the military, veterans and their families.

“It has treated presidents of other countries but today the first floor lies in ruins.

"The first floor has 12 theatres, ICU, casualties that catered for emergencies and the trauma unit, laboratory, pharmacy, radiology and other ancillary services. All was taken out when this project started.

“We have been told that has led to some specialists leaving the facility because the work they were meant to perform is no longer being offered by the hospital.

“This has literally led to the hospital being a white elephant.”

ANC MP Thabo Mmutle said: “This looked like it was a money-making scheme because you remove one consulting engineer and put in another and you escalate the costs but there is no progress in the actual work.”

Managing partner of Abacus Financial Crime Advisory, Herman de Beer, said his company was tasked with conducting a forensic investigation into the repair and maintenance programme (Ramp) at 1 Military Hospital, including a subsequent refurbishment project.

De Beer said: “In 1999, the public works department launched a Ramp. It was a slightly broader concept than the normal maintenance and the repair aspect was added.”

While repair and maintenance work began in 2006, construction work on the project commenced in 2001.

At the time the project led by public works cost an estimated R232m.

Between 2010 and 2011, the Ramp expansion took place at a cost of R156m.

The total cost was R431m.

“We were asked to do the investigation because certain floors were unfinished and locked after the spending of the R431m towards March 2011.”

He saidthe initial phase (2012-2014) led by public works was later taken over by the department of defence until now.

“In December 2000, SSI was appointed by the department of public works as principal engineers for Ramp. In January 2001 Multi-Pro was appointed by the department as Ramp  project manager. A status quo assessment by SSI on 1 Military Hospital was conducted between January and March of that year.”

In April 2001, a status quo report, including cost estimates issued by SSI, was produced.

“The project then went quiet for about four years,” said De Beer.

In October 2005, De Beer said the cost estimates for electrical and mechanical services was redone for structural and wet services by SSI, but a full status quo report was not again performed.

A tender for Ramp was issued by the public works department in July 2006 for the project to run until 2009.

De Beer said investigators found the department failed in its oversight responsibility to ensure a complete status quo report prior to the appointment of contractors.

“There was a failure by the departments of public works and defence to appropriately plan execution of Ramp 1 Mil as well as failures by the department of public works to appoint a single principal agent to manage Ramp at 1 Mil and oversight failure by the department to effectively coordinate on-site execution.”

On the Ramp expansion that occurred from 2010 to 2011, De Beer said investigators found the most significant challenges.

“The first action we determined was that on December 8, Superway and Fastmove contractors both received an extension of 12 months to November 2010, despite public works terminating all Ramp projects in December 2009 because they believed it was inappropriate”

Later a company called Babereki was appointed project manager to replace Multipro.

“December to May was the estimated completion of the first and second floor and kitchen area. From December 2009 to 2010, redesign and refurbishment was introduced. That’s one of the main reasons why the Ramp expansion turned out to be a disaster.

“On March 31 2011, all contractors and consultants left and doors on the first floor were locked. The pharmacy was incomplete and when we arrived in 2019, those doors were locked.”

The first floor is the highly technical and complex area of the hospital housing X-rays, scanning devices and laboratories. A decision was taken to redesign and refurbish that particular floor.

This led to design flaws, including passages leading to the theatre complex being too narrow to allow hospital beds to pass. The equipment bought also couldn’t fit through the doors and was never installed.

Approximately R20m worth of medical equipment, including scan, X-ray and mammogram machines, was purchased which later became obsolete.

De Beer said the procurement of medical equipment was regarded as fruitless and wasteful expenditure.

“We concluded the relevant department of defence officials be held accountable for the fruitless and wasteful expenditure.

“We further recommend that all expenditure of R156m, relating to Ramp expansion, be classified as fruitless and wasteful expenditure..

“The cost estimate for the refurbishment required to restore 1 Mil to what people thought it would be is R1.4bn, and due to the lack of facilities on the first floor, certain outsource work needs to take place at 1 Mil with patients moved to private facilities. The cost incurred for that is estimated to be more than R1bn.”

Adjutant-general of the army Maj-Gen Eric Mnisi told MPs after receiving the report, the legal service division collaborated with military police and submitted the matter to the Hawks.

“Our worry is that the National Prosecuting Authority’s hands are full. There are a lot of serious and prominent criminal prosecutions on their hands and this matter may fall between the cracks,” said Mnisi.

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