Mass Covid-19 testing has been ‘crippled’ by how SA buys supplies, says National Treasury

Business Insider SA
  • South Africa's ability to test for SARS-CoV-2 and treat the Covid-19 it causes has been "crippled" by the decentralised procurement system, the National Treasury says.
  • And that could affect decisions such as when lockdown ends.
  • Now all orders for personal protective equipment (PPE) from public institutions will be centralised, with a national government team deciding which province or region gets what, if rationing is required.
  • Government entities will pay only a set maximum price for gloves and masks, with the Solidarity Fund covering the rest of the bill if the goods can not be bought at those prices.
  • Here's what the government will pay for masks, gloves, and other coronavirus supplies.
  • For more stories go to the Business Insider South Africa homepage.

Handling procurement on a decentralised basis – as the South African government does – is a terrible idea during the Covid-19 pandemic, National Treasury says.

Usually, individual government institutions place their own orders for supplies such as personal protective equipment (PPE), which means even small municipalities are going to market looking to buy gloves and masks individually.

But the global crisis has crippled supply chains, complicated logistics, and caused countries to bid against one another for scarce protective supplies, Treasury says in an instruction to all public entities, so small orders are not getting priority in manufacturing and importation.

"More seriously, the small size of orders has crippled the process to place orders and procure products on the scale required to support mass testing and treatment initiatives, as recently pronounced by the President," Treasury director-general Dondo Mogajane writes in the instruction.

"This will, in turn make it difficult for government to make more informed decisions on the success of suppression and mitigation efforts like lockdown, and how it can and should be extended, and rapidly targeting hotspots that may be identified."

Central procurement – and rationing – is now in place

All public entities must now buy their gloves, masks, and protective visors – which are expected to be required by the millions of units – through a strict centralised process.

That system will also deal with deciding who gets what, when supplies run low.

See also | Wanted: 72 million more sets of gloves, and 82 million more masks, for SA’s Covid-19 crisis

The coronavirus disaster is "akin to a war situation with serious shortages and where rationing and price controls may be required," Mogajane says.

The decision on which province or hospital receives masks – and which does not – is to be "based on epidemiological data and current government priorities".

Maximum prices have been set for PPE, and the Solidarity Fund will make up any difference

Manufacturers and suppliers are demanding up-front payment before shipping critically-needed PPE, so under the centralised procurement system the independent Solidarity Fund will advance working capital for the state purchases.

It will then be repaid within 10 days of delivery. 

But the fund may not get back all its money.

The central procurement system also sets maximum amounts state institutions will pay for each item of PPE. If gloves or masks can be bought below those set prices, "the government will receive the benefit of this positive margin". But if those prices can not be achieved on the open market, "the Solidarity Fund will absorb the negative margin."

These are some of the maximum prices public institutions will pay for PPE under the central procurement plan.

  • Non-sterile examination gloves: R2.78 per pair
  • 3-ply surgical masks: R10.22 each
  • Leak-proof body bags: R272 each
  • 500ml bottles of sanitiser with at last 70% alcohol: R46.37 each
  • No-contact infrared body thermometers: R1888.50 each
  • Flexible-frame plastic goggles: R149 each

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