The Gauteng Health Department has run out of money to pay all but the most essential hospital suppliers in the current financial year that ends on 31 March this year.

Hospital managers are being told to engage with suppliers and give them "letters of commitment" that they will be paid in April and May.

I am aware that Nestle, African Oxygen and Vodacom are owed money, and payments are also being held back for electricity and water from local authorities.

The Department's Auckland Park Medical Depot owes 476 pharmaceutical and medical consumable businesses more than R500 million.

A small businessman has told me that he is owed R1.2 million and will have to close shop at the end of February if he is not paid (see note below).

This is a very sad situation. At least one company has taken legal action to recover money owed, and more legal actions are likely to follow.

Gauteng Premier Nomvula Mokonyane is in denial over the extent of this problem as she is quoted yesterday as saying that provincial government was close to paying the money it owed to service providers not paid for their goods or services since 2007.

This is simply not true. The money needs to be found to pay suppliers now as delaying payments to the new financial year is appalling financial management and grossly unfair to businesses.

Statement issued by Jack Bloom, MPL, Democratic Alliance Gauteng health spokesman, January 28 2010

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