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Tšepong agrees to termination of QMMH contract

by Lesotho Times
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  • demands billions in compensation from govt  

Pascalinah Kabi

THE Tšepong Consortium has elected not to challenge last month’s decision by the government to terminate its lucrative contract to run the Queen ‘Mamohato Memorial Hospital (QMMH) on behalf of the state.

However, the Consortium wants the government to immediately compensate it for the termination of the contract. It further alleges that the government would have to fork out way more than just the M3 billion which Finance Minister Thabo Sophonea has said is the termination fee. The Consortium alleges the government owes other sums in unpaid fees hence the demand for much more than just the termination fee. However, it does not say how much the government should pay. It merely says the amount is disputed by the government.

Health Minister Semano Sekatle announced last month that the government had resolved to cut ties with the Consortium which has run QMMH since it opened its doors to patients in 2011.

The parasitic relationship between the government and the Consortium has been a cause for concern for many years with the Consortium allegedly gobbling half of Lesotho’s entire health budget,  with most of that money ending up in the pockets of South Africa’s major hospital chain, Netcare.

Mr Sekatle said the government felt it could no longer continue its 18-year Private Public Partnership (PPP) entered into 2008 with the Consortium for the construction, running and transfer of the hospital due to serious differences which had plagued the agreement from the very beginning.

In October 2008 an 18-year PPP agreement was signed between the government of Lesotho and the new company, Tšepong Consortium, for the construction and operation of the hospital. Netcare has a 40 percent stake in the Tšepong Consortium. Four other companies, namely, Afri’nnai of South Africa, Excel Health, Women Investment and D10 Investments (all from Lesotho), hold the balance of the shares.

However, the Consortium has been under fire for allegedly fleecing the government and flouting the tenets of the agreement over the years. Its operations have also been hamstrung by ubiquitous staff strikes for salary increments since 2012.

Mr Sekatle said although the government and the consortium had differed over many issues, the final straw was the latter’s decision to fire 345 striking nurses and nursing assistants at the institution.

The nurses went on strike on 1 February 2021 to press the government and QMMH to award them salary increments to match their counterparts in other government and private institutions.

QMMH nurses said they have not been awarded any increments since 2012 when the government and the Christian Health Association of Lesotho (CHAL) increased the salaries of nurses at other institutions.

According to the Lesotho Nurses Association (LNA), nurses at QMMH earn about M9000 each per month. The figure is way less than the M13 000 earned by their colleagues in CHAL facilities and other government hospitals.

Health ministry Principal Secretary (PS) Khothatso Tšooana subsequently wrote to the Consortium informing it of the government’s decision to terminate the contract.

A 12 April 2021 letter to PS Tšooana by Tšepong general manager Zondy Mohapi indicates that the Consortium will not challenge the termination of its contract.

“Tšepong is concerned about the media announcements by the government of Lesotho since the commencement of the illegal strike,” Mohapi states in the letter to PS Tšooana titled “Notice of Operator Default”.

“Tšepong is concerned more specifically with regard to the following public messages: government does not support the dismissal of the nursing staff who participated in the illegal strike action and does not agree with actions taken by Tšepong management; government has requested the Minister of Health and Minister of Finance to terminate the PPP agreement; The contract should be terminated due to a parasitic relationship…and the government will re-employ dismissed nursing staff to the hospital as soon as the PPP Agreement had been terminated.

“These statements by the government to all major media within Lesotho and South Africa, signals the government’s repudiation of the PPP Agreement.

“Tšepong is therefore entitled, among other things, to accept the government’s repudiation, cancel the agreement forthwith and claim damages. Tšepong is also entitled to terminate the PPP Agreement because a government default prevails whilst undisputed amounts, that are contractually overdue to Tšepong, exceed the termination threshold. We look forward to receiving your election regarding the way forward to ensure the stability of the project whilst the parties agree on the most appropriate manner to hand back the project to government.”

In his termination letter, PS Tšooana had accused the Consortium of breaching its contractual obligations in terms of the PPP agreement.

Among other things, Mr Tšooana accused the Consortium of turning away emergency patients and refusing to admit patients referred from district hospitals. He also accused the Consortium of reducing bed capacity and occupancy.

Minister Sekatle also accused the Consortium of firing the striking nurses without first consulting or informing the government. The government has since resolved to rehire the fired nurses and nursing assistants and place them in state-run health facilities with effect from 1 May 2021.

However, Tšepong wants the government to shoulder the blame for the nurses’ strike.

“The government has failed to conduct an affordability review within the agreed time or at all. The illegal nurses’ strike was instituted by aggrieved nursing staff, as a result of the government of Lesotho reneging on its undertaking to perform this review,” Ms Mohapi states in her response to the government’s allegations.

She said there was no evidence to back the government’s claims that QMMH had refused to admit patients referred to it by the district hospitals. She also denied claims that there was a high nurse to patient ratio which compromised services to patients.

“Our records do not show any delay in the treatment of patients. Tšepong has been maintaining a ratio of 6 patients to 1 nurse which is lower than the acceptable industry standard of 8 patients to 1 nurse.

“On 26 September 2018, the government instructed Tšepong to terminate extra services and consequently little to no extra services have been performed from January 2019. Tšepong has only performed emergency cases and maternity cases. To accept cold case referrals, a variation to the PPP agreement is required,” Ms Mohapi states.

Minister Sekatle yesterday acknowledged receipt of the Tšepong letter. He said they were consulting with their finance teams over the amount to be paid to the Consortium.

“We are also setting up our legal team because definitely the matter will end up in court,” Mr Sekatle said in a brief interview with the Lesotho Times.


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