ActionSA can reveal, through official parliamentary replies (here and here) from the Minister of Health, that government continues to permit the looting of state coffers in the wake of the Tembisa Hospital corruption scandal.
It is deeply alarming that, despite the Special Investigating Unit’s (SIU) interim report revealing that over R2 billion was siphoned from Tembisa Hospital through 207 service providers across more than 4 500 purchase orders, South Africa’s procurement system remains wide open to exploitation by fly-by-night companies. Many of these entities were registered mere days or weeks before being awarded tenders, lacking any operational history, tax compliance, or proof of prior delivery of similar goods or services.
These revelations expose deep structural weaknesses in South Africa’s public procurement system, one that not only allows individuals with no experience, capacity, or track record to secure lucrative tenders, but even enables companies implicated in corruption to continue doing business with the state.
The Minister’s replies further reveal that, even after SIU investigations exposed these criminal networks and recommended blacklisting, no decisive action has been taken to prevent implicated companies or individuals from continuing to do business with the state. The Department of Health has admitted that it lacks the authority to blacklist suppliers which is a responsibility that lies solely with National Treasury. This bureaucratic loophole allows those under investigation to continue trading with other government departments while “awaiting” Treasury’s action.
However, a Presidency briefing to the Standing Committee on Public Accounts (SCOPA) in September revealed that of 467 individuals and companies recommended by the SIU to be added to National Treasury’s Restricted Suppliers Register, only one has been listed.
This shocking failure of consequence management in the fight against corruption led ActionSA to lodge a formal complaint with the Public Protector against the National Treasury and those responsible for blacklisting and blacklisting oversight. The Public Protector has now formally launched an investigation into this systemic maladministration.
Such inaction perpetuates a cycle of impunity. The continued participation of individuals and entities implicated in large-scale corruption reflects a government that has failed to address fundamental governance gaps in procurement oversight. Outdated and fragmented systems, combined with the absence of real-time vetting and interdepartmental coordination creates fertile ground for the same networks of corruption to reappear across multiple institutions.
While government frequently cites Broad-Based Black Economic Empowerment (BBBEE) as the cornerstone of its procurement policy, in practice, the system has been routinely manipulated to enrich a small, politically connected elite rather than empower the broader black population. The proliferation of shell companies established under the guise of empowerment not only betrays the spirit of BBBEE but also erodes public trust in genuine transformation efforts.
Until government implements a transparent, centralised supplier vetting system, one that automatically flags, suspends, and blacklists companies under investigation, the abuse of the procurement process will continue unchecked. Equally urgent is the need for legislative reform to prevent the establishment of companies solely for tender exploitation and to ensure that individuals linked to corruption face permanent exclusion from public contracting.
Tembisa Looting: ActionSA Exposes Blatant Procurement Failures and Government Inaction
ActionSA can reveal, through official parliamentary replies (here and here) from the Minister of Health, that government continues to permit the looting of state coffers in the wake of the Tembisa Hospital corruption scandal.
It is deeply alarming that, despite the Special Investigating Unit’s (SIU) interim report revealing that over R2 billion was siphoned from Tembisa Hospital through 207 service providers across more than 4 500 purchase orders, South Africa’s procurement system remains wide open to exploitation by fly-by-night companies. Many of these entities were registered mere days or weeks before being awarded tenders, lacking any operational history, tax compliance, or proof of prior delivery of similar goods or services.
These revelations expose deep structural weaknesses in South Africa’s public procurement system, one that not only allows individuals with no experience, capacity, or track record to secure lucrative tenders, but even enables companies implicated in corruption to continue doing business with the state.
The Minister’s replies further reveal that, even after SIU investigations exposed these criminal networks and recommended blacklisting, no decisive action has been taken to prevent implicated companies or individuals from continuing to do business with the state. The Department of Health has admitted that it lacks the authority to blacklist suppliers which is a responsibility that lies solely with National Treasury. This bureaucratic loophole allows those under investigation to continue trading with other government departments while “awaiting” Treasury’s action.
However, a Presidency briefing to the Standing Committee on Public Accounts (SCOPA) in September revealed that of 467 individuals and companies recommended by the SIU to be added to National Treasury’s Restricted Suppliers Register, only one has been listed.
This shocking failure of consequence management in the fight against corruption led ActionSA to lodge a formal complaint with the Public Protector against the National Treasury and those responsible for blacklisting and blacklisting oversight. The Public Protector has now formally launched an investigation into this systemic maladministration.
Such inaction perpetuates a cycle of impunity. The continued participation of individuals and entities implicated in large-scale corruption reflects a government that has failed to address fundamental governance gaps in procurement oversight. Outdated and fragmented systems, combined with the absence of real-time vetting and interdepartmental coordination creates fertile ground for the same networks of corruption to reappear across multiple institutions.
While government frequently cites Broad-Based Black Economic Empowerment (BBBEE) as the cornerstone of its procurement policy, in practice, the system has been routinely manipulated to enrich a small, politically connected elite rather than empower the broader black population. The proliferation of shell companies established under the guise of empowerment not only betrays the spirit of BBBEE but also erodes public trust in genuine transformation efforts.
Until government implements a transparent, centralised supplier vetting system, one that automatically flags, suspends, and blacklists companies under investigation, the abuse of the procurement process will continue unchecked. Equally urgent is the need for legislative reform to prevent the establishment of companies solely for tender exploitation and to ensure that individuals linked to corruption face permanent exclusion from public contracting.