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Procurement Tracker Namibia PROCUREMENT TRACKER NAMIBIA Issue No. 12 May 2021 Stop the rot Ministry of Finance at Psemas to blame for Psemas Revamp of – Venaani woes - Haufiku Psemas in progress PSEMAS is Just a Questions over Scandal Clinicians Psemas tender Scapegoats for PSEMAS Mismanagement PSEMAS audit PSEMAS still on-going PSEMAS not reaching the PSEMAS and State recovers needy: WHO Methealth N$13m of Psemas money arrangement a bad deal The PSEMAS conundrum The administration contract remains up in the air as Administrators has reportedly pocketed hundreds of millions politically connected companies circle of dollars through these extensions. In the last round of bidding in 2020, questions were raised The administration contract for the Public Service Employ- around the bid specifications, which appeared to have been ees Medical Aid Scheme (PSEMAS) remains in the hands of designed to favour Methealth Namibia Administrators, thus incumbent administrator Methealth Namibia Administrators raising the spectre of bid design corruption and leading to following the cancellation of the latest round of bidding for the an investigation and an extended bidding process, and the contract in early December 2020. eventual disqualification of all bidders in November-Decem- As indicated in Issue 11 of Procurement Tracker Namibia ber 2020. (PTN), Methealth Namibia Administrators, which counted some Interestingly, Methealth Namibia Administrators did not bid ruling Swapo Party connected individuals among its share- for the PSEMAS administration contract in 2020 – a contract holders, has reportedly had a spotty record as administrator of valued at over N$300 million over the contract period – but it the multi-billion dollar PSEMAS. remains the administrator following the cancellation of the last Methealth Namibia Administrators’ contract has been contract bidding process. extended six times over recent years as the finance ministry The questions that arise in the wake of this failed process has repeatedly failed to finalise successive processes for the are: What happened and who is involved? awarding of the administration contract. Methealth Namibia TO PAGE 2 PROCUREMENT TRACKER FROM PAGE 1 What happened? Namibia (Pty) Ltd. Two of these bidders have direct The fact that the PSEMAS ad- What happened was that on 2 Decem- links to the ruling Swapo Party, namely: ministration contract has not ber 2020 the Central Procurement Board NamHealth (Pty) Ltd; and, Prime Health been awarded has not hurt ei- of Namibia (CPBN) issued a notice to Namibia (Pty) Ltd. ‘‘ ther Kalahari Holdings or Zebra all bidders that the process to procure Another bidder, Keyplot Investments Holdings, for both have been an administrator for PSEMAS had been (Pty) Ltd, is 100% owned by United benefiting from the current ar- cancelled because all the bidders had Africa Group (UAG), which is co-owned rangement of continued exten- been disqualified “due to the fact that by former Swapo Party parliamentarian sions of the Methealth Namibia the bids were non-responsive”. Martha Namundjebo-Tilahun. Administrators contract. What “non-responsive” largely meant, Both NamHealth and Prime Health according to the executive summary of Namibia have the ruling party’s main the bid evaluation report attached to commercial arm, Kalahari Holdings, as the notice of cancellation, was that all a shareholder. Prime Health Namibia National Union of Namibian Workers of the bidders failed to submit some or also has another ruling party holding (NUNW) umbrella. ’’ other relevant and required documen- company as shareholder, namely Zebra What is more, the fact that the PSE- tation in their bids. At the same time, Holdings. MAS administration contract has not some bidders were also additionally Additionally, most of the shareholding been awarded has not hurt either Kala- disqualified over their shareholding (ful- in Prime Health Namibia is held by the hari Holdings or Zebra Holdings, for both ly Namibian-owned entities were called commercial and investment arms of have been benefiting from the current for) and structures (joint ventures were ruling party affiliated unions, under the arrangement of continued extensions of not considered). the Methealth Namibia Administrators There were just six bidders for the contract. PSEMAS administration contract and all According to the current finance six fell at the first hurdle of submission Why this matters ministry webpages for PSEMAS, the of “Mandatory Documents”, with the scheme is being jointly administered by bid evaluation committee not going any Ruling party headed state Methealth Namibia Administrators and further to consider any of the bids on organs, such as the Ministry of Fi- NamHealth. administrative, technical and working nance, are adjudicating and hand- Zebra Holdings is a reported share- capital requirements. ing contracts to ruling party owned holder in Methealth Namibia Administra- and affiliated commercial entities, tors, while Kalahari Holdings is a minori- Who is involved? raising threats of conflicts of inter- ty shareholder in NamHealth, along with est and political capture of strate- the National Youth Service, a statutory The six companies that submitted gic state resources (PSEMAS) by and state-owned entity dominated by bids for the PSEMAS administration ruling party affiliated persons and ruling party appointees. contract between 4 June 2020 and entities. In the process, the credi- With the PSEMAS administration 23 September 2020 were: Integrated bility, fairness and competitiveness tender set to be re-advertised as called Wellness Solutions (Pty) Ltd; Maungo of procurement and decision-mak- for by the CPBN chairperson, Patrick Consultancy CC T/A GoMed; NamHealth ing processes are undermined and Swartz, in his bid cancellation notifica- (Pty) Ltd; Keyplot Investments (Pty) needlessly clouded by suspicions tion letter of 2 December 2020, watch for Ltd; Amalgamated Fund Administrators of corruption. these entities to resubmit their bids for Namibia (Pty) Ltd; and, Prime Health this lucrative multi-year contract. Slow PSEMAS reform The Public Service Employees Medical Aid Scheme (PSE- but implementation remained problematic. MAS) has been plagued by waste, fraud and mismanage- In the latest attempt, on 24 July 2020, a PSEMAS reform ment for years, with the result that the scheme has become task team was created by the finance ministry under the inefficient and unsustainable. PSEMAS coordinating committee to investigate and recom- Reforming PSEMAS has been on the cards for more than mend an appropriate benefits structure and governance a decade, going back as far as 2007 when a PSEMAS coordi- model for the scheme. nating committee – consisting of the executive directors in Among the specific duties of the reform task team is to the Prime Minister’s office, the finance and health ministries, propose a “robust functional governance structure and and trade union representatives – was created by the Cabi- institutional arrangements for PSEMAS”; to analyse and net of former President Hifikepunye Pohamba to spearhead “propose a sound management and administration frame- reforms. However, not much appears to have come of this, work”; and, to propose a “robust financial risk management while since then PSEMAS inefficiencies have worsened. framework” and a “sustainable financing model”. In June 2017, a PSEMAS reform unit was established to These processes appear ongoing and Procurement Track- revive the functions of the PSEMAS coordinating committee, er Namibia will endeavour to report on them later in 2021. 2 PROCUREMENT TRACKER Stink remains around Defence sanitiser procurement A COVID-19 related emergency pro- is viewable in a folder on the Ministry curement transaction in 2020 contin- of Finance (MoF) website, a contract ues to raise questions numbered G/EP/08-02/2020 was award- ed to Phoenix Capital Investments CC on In early March 2021, newly installed 18 June 2020 to supply “COVID-19 Items” Windhoek mayor Job Amupanda to the MoD at a cost of almost N$9,5 splashed documents across social media million. platforms that he alleged implicated then The contract was awarded using the defence minister Peter Vilho in a corrupt direct procurement method, as the COV- emergency procurement transaction. ID-19 state of emergency was in effect at The transaction in mid to late 2020 the time. involved the purchase of large quantities It thus seems that the purchase order of hand sanitisers and disinfectant fluids, with the same contract number and dat- along with masks, at what were publicly ed 26 June 2020 was issued a week after and roundly condemned as massively the contract award. over-inflated prices. The MoD first quarter procurement However, despite the allegations of report indicates that the N$9,5 million corruption against Vilho having been re- was paid, but does not indicate when, ported on by the media and the contro- Peter Vilho but it is plausible that such a payment versy making a turn in parliament, where could have been made either in July or Vilho was pressed to provide answers by September 2020, which was the period the political opposition, what actually 26 June 2020 for 1,000 masks, 1,000 (25 of the second quarter and for which a transpired remains unclear. litre) containers of hand sanitiser and quarterly procurement report is not 1,000 (25 litre) containers of disinfectant; available on the MoF website. The allegations a tax invoice, dated either 9 July 2020 or However, the MoD third quarter (Oc- 7 September 2020, from Phoenix Capital tober - December 2020) procurement Windhoek mayor Amupanda, pointing Investments CC for 1,000 masks, 450 (25 report does not reflect any procurements to documents he posted online, alleged litre) containers of hand sanitiser and 97 from or payments to Phoenix Capital that a company called Phoenix Capi- (25 litre) containers of disinfectant. Investments CC in that quarter. tal Investments CC, which he said had The MoD purchase order reflected an No fourth quarter (January - March links to Peter Vilho, had been irregularly amount of just over N$8,2 million, while 2021) procurement report is available on awarded a procurement contract by the Phoenix Capital Investments CC tax the MoF website.
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