State wastes R136m on health smart cards

Pilot project discontinued

THE standing committee on public accounts (Scopa) in the Gauteng legislature has estimated that millions of rands of taxpayers' money have been paid for a smart card project that was discontinued.

According to Scopa, R136.78-million was spent on the smart card pilot project. However, a written reply by Health Minister Aaron Motsoaleditwo years ago said that "more than R200-million" was splurged on the system.

Worse, all this money was spent only during the pilot phase.

The smart card, containing patients' medical history and intended to cut waiting periods at state hospitals and clinics, was piloted at Diepkloof Clinic and the Lillian Ngoyi Community Health Centre in Soweto and at the Sebokeng Hospital.

Health department spokesman Simon Zwane said the decision to discontinue the project was announced after the 2009 general elections.

"My information is that the smart card (system) was only piloted. It didn't proceed after the pilot. It was only piloted and that (R136.78-million) was the amount paid."

Zwane said "affordability and cost" issues resulted in the project being cancelled, adding that the decision was taken because "the department was overspending and took a view that we needed to control spending".

The smart card system has been a source of controversy since it was mooted by then Gauteng premier Mbhazima Shilowa in 2007 and ended up the subject of an investigation by the Special Investigating Unit, which began in May 2010.

The tender for the project was awarded to KOPM Logistics, which is owned by Dr Peter Matseke, for a staggering R609-million. KOPM Logistics' bid was R104-million higher than Lifesense Clinics' bid, which stood at R505-million, and R169-million higher than the Price Waterhouse Coopers Consortium's bid, which was R440-million.

In a February 2010 parliamentary written reply to the DA, Minister of Health Aaron Motsoaledi indicated that the provincial health department had a problem managing its finances and that a forensic company had been brought in by the national Treasury to look into several contracts in which money was paid but services not rendered.

Motsoaledisaid: "Many contracts allowed for payments to consultants before services were actually delivered and in some cases, contracts were awarded and payments were made without any subsequent completion of projects. For example, more than R200-million was paid for a Health Information System (HIS) and a smart-card system that never materialised."

Neither Zwane nor the DA's Jack Bloom could say how much had been spent on the two projects so far.

Said Bloom: "The whole thing was a giant waste of time and money. Both projects were piloted, but never got off the ground. We spent R100-million on it (HIS) and got nothing out."

Sowetan has been able to establish that in 2010 senior health officials sought an in-camera meeting with members of the Gauteng legislature's Scopa to explain how the R136-million was spent.

The request for the in-camera meeting - which never went ahead - was confirmed by Scopa chairman Sipho Makama.

"They indicated that some of the things (they wanted to talk about) were sensitive and that it would be better to meet in-camera," said Makama.

Scopa is scheduling another meeting.

Explaining why Scopa had resolved not to approve, as unauthorised expenditure, the money spent on the HIS and smart card contracts, Makama said: "They couldn't even explain themselves. That is why we said we couldn't authorise something that the people who were responsible for, could not explain."

Spokesman Boy Ndala said: "The SIU can confirm that the investigation into the Department of Health in Gauteng is ongoing and parts of the investigation was reported to the NPA.

"Three of the matters have been referred to the Anti Corruption Task Team for further investigation,"he said. -

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