Masemola says cancelled R360m Medicare24 contract will be re-advertised after audit
National Police Commissioner Fannie Masemola told Parliament the R360 million Medicare24 contract was cancelled in April after an audit revealed serious procurement irregularities and poor service delivery by the private provider.
Image: Armand Hough/Independent Newspapers
National Police Commissioner Fannie Masemola told Parliament’s ad hoc committee on Thursday that he cancelled the R360 million Medicare24 Tshwane District contract in April.
The cancellation followed an internal audit that flagged poor performance, bid fronting, and serious procurement irregularities.
He said the contract has not yet been re-awarded, but a re-advertisement process is under way and will proceed once a forensic audit is finalised in October or November.
Masemola testified that the multi-million-rand health risk management contract, awarded in June 2024, had followed the usual procurement chain, including specification, bid evaluation, and adjudication, and was ultimately signed off by the Divisional Commissioner for Supply Chain Management.
“It doesn’t land on my desk at all,” he said.
While Masemola had no direct role in awarding the contract, he told the committee that he received a call from a member of IDAC, believed to be Mr Perumal, raising concerns about Medicare24’s tax compliance and previous involvement in procurement scandals at Tembisa Hospital.
“I enquired from the relevant officials, the response I got was that the company had submitted a valid tax clearance certificate,” he said.
“Medicare24 is not blacklisted by the National Treasury they are free to bid like anybody else.”
At the time, Masemola said, he was unaware that Medicare24 was linked to businessman Vusimuzi “Cat” Matlala.
“I didn’t know who is the owner of the company, and I also didn’t know who is Vusimuzi Matlala,” he said. “Later I learned that he was the person behind Medicare24.”
In December 2024, newly appointed Police Minister Senzo Mchunu requested a meeting to discuss the contract. The meeting took place virtually on 24 December.
“We discussed the issue around the contract, the service delivery,” Masemola said. He then instructed SAPS internal audit and risk management to probe the matter further.
A preliminary internal audit report, finalised in January 2025, raised serious concerns.
According to Masemola, it found that the Bid Evaluation Committee “lacked the appropriate skill and competence to evaluate the bid,” there was no individual scoring, and the due diligence process failed to consider the bidder’s ethical history.
It also found evidence of misrepresentation and fronting, and warned that the use of external facilitators had exposed SAPS to a “corruption risk damaging to SAPS’ reputation”.
Despite these red flags, SAPS had already paid R50 million to Medicare24 in January. Masemola confirmed this payment, saying the company had delivered services, including the processing of 5,500 police college recruits, albeit after being issued with written warnings over poor performance.
“There were problems around that, but eventually they delivered the service,” he said.
In March, following the preliminary audit findings, Masemola issued a notice asking the company to provide reasons why the contract should not be terminated. After legal consultations and receipt of the final audit report in April, he cancelled the contract.
It has not been re-advertised yet. “There is a forensic audit that is being done… and once that is finalised, then we are going to re-advertise,” Masemola told MPs.
He added that SAPS would pursue disciplinary action against staff implicated in procurement irregularities, but only after the forensic report is completed.
“We have experiences in the past where you do that [too early], and later you find more involvement of other people. So the advice was that we finalise the forensic audit first.”
Masemola said he had also introduced tighter procurement controls, including a mandatory “propriety audit” before any large contract is awarded.
“Only once that has happened, only then can they award,” he said, adding that he is reviewing delegated signing powers for high-value contracts.
While some legal advisers raised concerns about delaying awards for additional auditing, Masemola said: “That is the route we are going. If there are those that challenge the process, we’ll take it from there with the legal people.
hope.ntanzi@iol.co.za
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