The National Prosecuting Authority has seized over R1 billion in contract claims from the Gauteng Department of Health, following allegations of tender rigging involving the procurement of a health information system.
The authority says the seizures are linked to two tenders awarded by the department in 2007. "The freezing order of R1.4bn is the biggest ever obtained by the NPA asset forfeiture unit (AFU)," said spokesperson Nathi Mncube.
Baoki Consortium was awarded a tender for a health information system and electronic health records (HIS-eHR) at the time and the NPA says the company was party to the deal being rigged when Heinz Smidek was CEO of one of the consortium's companies.
The NPA says Smidek paid around R4.6 million for a house in Bryanston and thereafter allowed Brian Hlongwa - the MEC for health during 2007 and 2008 - to live in it rent-free. In return, Hlongwa allegedly influenced decisions in favour of Baoki.
Baoki were awarded the final R1.2 billion HIS-eHR contract in late 2008. But the NPA says the contract was awarded despite the health department not having the money, infrastructure or trained staff for the system.
Mncube said the contract was approved even though the finance MEC at the time refused to sign it.
No progress
The contract also required the health department to pay Baoki every month, with the consortium receiving a total of around R460 million. The delivery, however, did not take place.
After the 2009 elections, when a new health MEC was appointed, Hlongwa's replacement terminated contracts involved in the rigging, with Baoki among the companies that subsequently sued the department for damages.
Mncube adds that allegations of fraud and corruption were then investigated by the Special Investigating Unit (SIU) and the Hawks.
Based on the investigation, NPA this week obtained three preservation orders under the Prevention of Organised Crime Act, freezing the contractual rights Baoki and 3P Consulting - a company awarded a tender to set up a procurement management unit.
The NPA says the contractual claims of the two tenders were then seized - with Baoki's being worth around 3P's being worth around R1.1bn, while the 3P contract totalled R300 million.
Government would not have to pay the money if the NPA is successful with its final forfeiture application.
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