Gauteng Health owes 296m to 509 companies
4 April 2016
The Gauteng Health Department owed R296 million to 509 companies at the end of January this year.
This was disclosed by Gauteng Health MEC Qedani Mahlangu in a written reply to my questions in the Gauteng Legislature.
This a shocking amount of money owed to suppliers, many of which are struggling small businesses.
According to Mahlangu, only 56% of supplies had been paid within the legally required 30-day period.
Much of the debt to companies is long-term - 245 suppliers are owed a total of R239 million for more than three months and 203 suppliers are owed R105 million for more than six months.
Mahlangu says that the late payments are because of the following:
- Late submission of invoices by companies
- Delays in submission of invoices to institutions by suppliers
- Suppliers who deliver over the ordered quantities and charging incorrect prices on invoices after receipt of an order with a predetermined price.
I have a list of the 509 unpaid companies which ranges from fairly small amounts to huge amounts like the following:
Phillips South Africa (Pty) Ltd - R35m
National Health Laboratory Services – R33.5m
Iveco South Africa (Pty) Ltd – R18.7m
Kunene Health Care (Pty) Ltd - R 7.1m
The Nursing Services of SA - R 5.7m
SA National Blood Service - R 3.9m
Johnson & Johnson Medical (Pty) Ltd - R 3.5m
Respiratory Care Africa (Pty) Ltd - R 3.4m
Mahlangu shouldn't be blaming companies for the late payments as the major reasons are budget problems and poor administration. Companies often submit multiple copies of documents that keep getting lost.
I know of companies that supply vital medical equipment but don't want to deal with the department because they fear that they won't get paid.
While Premier David Makhura has acknowledged the difficulties faced by businesses because of late payments, these figures show the extent of the problem in the health department that needs urgent intervention.
Issued by Jack Bloom, DA Gauteng Shadow MEC for Health, 4 April 2016
