The Gauteng department of health owes businesses more than R3.1bn in unpaid invoices.
The department which has come under fire due to the shocking conditions patients have been subjected to at Chris Hani Baragwanath Academic Hospital in Diepkloof, Soweto, owes money to 42,519 businesses.
Black Business Council CEO Kganki Matabane says the issue of unpaid invoices has got worse over the years and the council is now seeking intervention from national government as provincial engagements have not yielded any results.
“We met with President Cyril Ramaphosa just before he delivered the state of the nation address and we’re busy arranging a follow up meeting with him to get a report on our initial meeting and proposals we put through,” Matabane said.
A lot of BBC’s members have had to close their businesses due to loss of income, he said.
“Big business can survive non-payment by government departments but small businesses have closed down because they do not have reserves like big business.
“It’s not only the department of health but a lot of the construction companies are owed money by the department of public works which is one of the reasons why we decided to engage the president so we don’t address issues bit by bit,” Matabane said.
In a statement on Sunday, DA shadow MEC for health Jack Bloom said the R3.1bn figure was revealed during a meeting of the legislature’s finance committee where it was stated that the suppliers had not been paid within the legally required 30 days.
Bloom said Tembisa Hospital owed the most: R333m to 1,576 suppliers.
“Charlotte Maxeke Johannesburg Hospital owes R234m to 2,908 suppliers, followed by the Far East Rand Hospital which owes R230m to 1,795 suppliers.
Recent problems of food supply at the Chris Hani Baragwanath Hospital can be traced to the R226m that the hospital owes to 2,477 suppliers.
Blood added it was unacceptable that so many suppliers had not been paid and many of them had stopped services, including Buhle Waste, which is why smelly medical waste was building up at Gauteng hospitals.
“Late payments are particularly harsh on small companies who sometimes go under because they run out of cash, and staff and patients suffer when services are cut.
“The department typically runs out of money towards the end of the financial year, so the R3.1bn arrears will cut into the 2022/23 health budget of R59.4bn which starts on April 1 and has not been increased from the previous year.
“A financial bail-out will be necessary to clear the arrears, but this should be with strict conditions to fix the poor financial management that plagues this department which is mired in corruption scandals,” Bloom said.
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