Psemas administration scrutinised

THE administration contract of the Public Service Employee Medical Aid Scheme (Psemas), which is worth N$300 million and remains in the hands of Methealth Namibia Administrators, is being questioned.

Institute for Public Policy Research (IPPR) in its Procurement Tracker Namibia report for May says Methealth Namibia Administrators did not bid for the Psemas administration contract in 2020, but remains the scheme’s administrator, following the cancellation of the last contract bidding process.

The report says questions were raised in the last round of bidding in 2020 around the bid specifications, which appears to have been designed to favour Methealth Namibia Administrators.

This raised the spectre of bid-design corruption and led to an investigation and an extended bidding process, as well as the eventual disqualification of all bidders in November/December 2020, the IPPR states.

“The questions that arise in the wake of this failed process are: What happened, and who is involved?” the IPPR says.

The tender, which was extended a few times, closed in September last year.

However, the Central Procurement Board of Namibia (CPBN) on 2 December last year issued a notice to all bidders, saying the procurement process was cancelled because all bidders were disqualified “due to the fact that the bids were non-responsive”.

“Non-responsive” means all bidders failed to submit the relevant and required documentation in their bids.

According to the IPPR, some bidders were also disqualified because of their shareholding and structures.

Fully Namibian-owned entities were called for, and joint ventures were not considered.

There were only six bidders for the Psemas administration contract, and all six fell at the first hurdle, which was the submission of “mandatory documents”.

This led to the bid evaluation committee not further considering any of the bids on administrative, technical and working capital requirements.

Meanwhile, the IPPR says Methealth Namibia Administrators, which counted Swapo-connected individuals among its shareholders, reportedly had a tarnished record as administrator of the multibillion-dollar government medical aid scheme.

“Methealth Namibia Administrators’ contract has been extended six times over recent years as the finance ministry has repeatedly failed to finalise successive processes for the awarding of the administration contract,” the IPPR states.

The administrators reportedly pocketed millions through these extensions.

The IPPR further called on the government to fast-track the process of reforming the public workers’ medical aid.

The process has been on the cards for more than a decade, going back as far as 2007.

“However, not much appears to have come of this, while since then Psemas’ inefficiencies have worsened. Psemas has been plagued by waste, fraud and mismanagement for years, with the result that the scheme has become inefficient and unsustainable,” they say.

In June 2017, a reform unit was established to revive the functions of the Psemas coordinating committee, but implementation remained problematic.

In the latest attempt the Ministry of Finance formed a reform task team under the Psemas coordinating committee on 24 July 2020 to investigate and recommend an appropriate benefit structure and governance model for the scheme.

These processes are ongoing.

On a different matter, the IPPR also calls on the Procurement Policy Unit to investigate the former minister of defence and veterans affairs’ sanitiser tender valued at N$9,5 million.

The civil society organisation says a report should be produced and action taken against those responsible for any irregularities.

In early March 2021, newly elected Windhoek mayor Job Amupanda splashed documents across social media platforms, implicating then defence minister Peter Vilho in a corrupt emergency procurement transaction.

The transaction, which took place last year, involved the purchase of large quantities of hand sanitisers, disinfectants and masks at inflated prices.