Medical waste firm finds deal is rubbish
● A small businessman is squaring up for a David and Goliath court battle with a giant medical waste company over a multimillionrand tender to dispose of needles, bandages, swabs and human body parts from hospitals and clinics in KwaZulu-Natal.
Bonginkosi Makhathini, MD of NNK Logistics trading as Makhathini Medical Waste, in Hillcrest, is suing Ian du Randt, MD of Durban-based Compass Waste Solutions.
Compass, which describes itself on its website as a “market leader in health-care waste with a national footprint”, has amassed billions of rands in the multibillionrand medical waste industry — a sector that has long been plagued by allegations of tender-rigging.
At the heart of the legal dispute is a R25m tender for health-care risk waste management and disposal in four districts in the province, awarded to Compass by the KwaZulu-Natal health department in 2015.
In a summons dated March 12 2018, NNK accuses Compass of breaching a written agreement concluded in April 2013 in which Compass subcontracted NNK to transport health-care risk containers.
The Sunday Times has seen a copy of the transport service agreement between the two companies, signed by both parties on April 21 2013.
The contract indicated that NNK was to be paid R25.8m over a 36-month period.
But NNK has accused Compass of breaching the agreement by failing or refusing to instruct it to start work and allowing the department to render most of the work inhouse, failing to inform it timeously or at all of the circumstances preventing it from rendering services — and of generally acting in bad faith.
“At all material times, including such times when [Compass Waste], alternatively the department, rendered the services, [NNK] was ready, willing and able to render them,” NNK says in court papers.
Makhathini told the Sunday Times that Compass’s exclusion of his company had affected “us in a negative way, which nearly caused us to liquidate the company”.
“My company invested a lot of money,” said Makhathini.
“We acquired vehicles, hired staff which were trained to be compliant, secured premises and made all applications to the relevant authorities in order to make sure when the time to start comes we are well prepared.”
Compass admitted in its plea that it had concluded a written agreement with NNK but denied breaching the agreement and blamed the health department for refusing or failing to “give effect to the service-level agreement”.
Compass marketing manager Tenley Cummings said the tender required a rate per kilogram whereby the waste would be weighed at each hospital before collection, whereas the previous tender was based on volume.
She said the department did not provide the scales and did not implement the terms of the tender, adding that the department was mainly doing the collection and transportation itself.
Cummings said this was fully explained to NNK but NNK had chosen “to sue Compass for the loss of profit it would have made for the transport work even though it has not rendered any transport services”.
KwaZulu-Natal health department spokesperson Ncumisa Mafunda said: “This is a legal matter. As a matter of principle, the department does not ventilate on such matters in public.”