Thursday, May 21, 2009

Gauteng government R50-m hospital food debt crisis

Hospitals in Gauteng owe millions of rands to food supply and distribution companies - with some city institutions being the worst culprits.

One of the worst Pretoria hospital debt offenders is George Mukhari Hospital near Ga-Rankuwa, which owes the Midland Meat company R765 000.

The hospital, which is now securing other suppliers, is also believed to owe hundreds of thousands of rands to other food suppliers.

Weskoppies Psychiatric Hospital in Pretoria held a fete on Saturday in an attempt to raise desperately needed funds.

Hospital staff say the money generated by the event is desperately needed so that the cash-strapped hospital can function properly.

Midland Meat says Weskoppies owes it R230 000. The company has now stopped supplying the institution until it is paid.

According to sources the Pretoria News has spoken to, the amount owed to the food companies by the provincial government is close to R50-million.

It appears that no plans have been made for the province to settle its debts.

Finance MEC Mandla Nkomfe's April 14 deadline for all payments to be made has come and gone, and hospitals, according to former food suppliers, are now tendering with new suppliers and distributors.

Documents and emails in the Pretoria News's possession from city hospitals confirm a huge debt and show that companies are withholding supplies.

In an email Steve Biko Academic Hospital chief executive Dr Ernest Kenoshi confirmed to the DA's Jack Bloom that contracted suppliers had stopped supplies to the hospital.

"Yes, it is true that contracted suppliers of baby formula milk, bread and meat have stopped supplies, giving as a reason long overdue payments through the GSSC system. See - Still no baby formula for HIV mothers
Mother feeds baby black tea

"However, there are no shortages of these items in the hospitals as we have activated our contingency plans to keep patients fed all meals by obtaining deliveries from other suppliers.

"We are in constant discussions with the suppliers on a daily basis and also working daily with GSSC to expedite payments."

The GSSC is the Gauteng Shared Services Centre which falls under the provincial Finance Department and deals with all supplies to hospitals.

Another Pretoria hospital seeking new food suppliers is Kalafong Hospital, near Atteridgeville.

A letter from the hospital superintendent, Dr Lancelot Phalatsi, to the Gauteng Health Department's services branch acting head, Dr P Maduna, lists 12 companies that have stopped supplying the hospital.

Phalatsi, in his March letter, says: "This is not an exhaustive list; we are still working on a complete report."

A memo from the hospital's procurement department, which is attached to the letter, states: "As can be seen, all these companies supply food and therefore have a direct impact towards patients.

"The following are just a few (companies) that continuously query their account with us … please find copies of our commitment register to the GSSC of orders that we sent from November 2008 until today that are still not paid."

Andre Hattingh, Midland Meat's hospital tender accountant, said they were owed R3.4 million from deliveries to 30 Gauteng hospitals dating back to 2007. "Of this money R1.7 million is from Pretoria hospitals.

"The department has given us every excuse imaginable for not paying us," he said.

Hattingh said the city's worst offending hospitals were George Mukhari Hospital, which owed R765 000; Steve Biko Academic Hospital (R239 000); Weskoppies Hospital (R230 000); Kalafong Hospital (R163 000); and Jubilee Hospital (R114 000).
He said they had stopped deliveries and would only restart them once payments had been received.

Seef le Roux, Mageu Number One's financial executive, whose company has stopped deliveries to Kalafong, Weskoppies and Steve Biko Academic hospitals, said they had had problems since they had first tendered for the hospital food contract four years ago.

The company supplies Mageu, a maize drink product.

"We are owed R80 000 and so far we have written off R40 000 worth of debt and are looking at writing off more debt.

"The department's excuses are ridiculous and we will stop further deliveries if we are not paid," he said.

Bloom said the payments disaster had to be sorted out.

"We need to ask why the provincial government is not paying its debts as we cannot have hospitals making alternative arrangements only to run into debt again because the province can't pay," he said.

Despite promising to respond to questions e-mailed, the Gauteng Health Department failed to comment by the time of going to print.

See also - Gauteng baby formula backlog cleared

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