The South African Medical Devices Industry (SAMED) says it is disappointed that the Gauteng Department of Health has failed to live up to its commitment to pay outstanding debt owed to its members by the end of last month.
The South African Medical Devices Industry, SAMED, has again lashed out at the Gauteng Health Department for not honouring its promise to pay its debt by the end of March. The organisation says 53 of its members are still owed about R135 million from the previous year. In a recent meeting held in February, senior officials of the National Health Department committed themselves to settling the accruals by end of March. But the Chief Operations Officer of SAMED, Tanya Vogt, says this has not happened satisfactorily.
“We acknowledge that some companies have received payments. But, in a meeting with the DG of Health in February this year where she met with suppliers, she committed that they would pay all the accruals by 31st March 2012. In other words, all the amounts that government owes from March 2011 back, would be paid by March 2012. So, we asked our members to indicate to us if there were still outstanding amounts as of March 2011. And the amount still outstanding from March 2011 back that has not been paid is R135 million to 53 companies”, Vogt says.
The R135 million that the Gauteng Department of Health owes members of SAMED is from the 2010 – 2011 financial year. When adding that to the debt that accumulated in financial year 2011 – 2012, it means the department owes suppliers even much more.
“We also then asked our members what is owed from 1 April 2011 to current. That amount is sitting at R237 million. So, in total, government still owes 53 medical device suppliers R373 million”, explains Vogt.
But the Gauteng Health Department says it has stood by its promise to make all necessary payments by end of June this year. Spokesperson, Simon Zwane, says, so far, R144million has been paid to some of SAMED members and they are continuing to liaise with suppliers and pay money owed to them.
Zwane says they, however, cannot divulge as to who exactly has and has not been paid as some of the suppliers in a previous meeting asked that their business dealings be kept away from the spotlight. Meanwhile, Vogt says they have requested another meeting to review the situation.
“We have written a letter to the MEC for Health. We have copied almost everyone... the Minister of Health, the presidential hot-line, the Minister of Finance, the Auditor-General, the Public Protector, the Premier for Gauteng Province... and we have indicated the situation and asked for an urgent meeting to review and find out what is happening, essentially. What have they put in place to resolve these issues?”, she says.
One of the companies affiliated to SAMED says business has been difficult in the past couple of months due to the lack of payment by the department. The company is owed over R13 million and it’s hoping to get, at least, half of that by the end of next week. It supplies products such as wound dressings and surgical implants to hospitals. The company’s manager, who spoke on condition of anonymity, says it’s hard to sustain a business under such circumstances.
“Thank goodness we are a national company; we do not just service Gauteng. So, we are not on the brink of closing down. In fairness to Gauteng, there has been written communication that they will settle what they owe us before the end of this month. We are hoping that they keep their promise. But it has been very hard and one of the reasons we haven’t closed shop as yet is because of the close relationship we have with our multi-national suppliers”.
The manager says, as a small business enterprise, this is an embarrassing state of affairs.
“Our multi-national suppliers have been understanding during this difficult time, but it is also embarrassing for us. Every year we go cap in hand to our multi-national suppliers to re-negotiate credit terms. When are we going to grow up and be able to run a business with pride and say we are out of kindergarten now?”, he says.
In the meantime, the South African Medical Devices Industry, SAMED, says it has given its members legal guidance should they wish to take the Gauteng Health Department to court to force them to pay.