Government severs ties with Tšepong consortium



MASERU – Lesotho government has ended its relationship with the Tšepong Consortium, engaged in 2009 in a public private partnership (PPP) to rebuild the country’s failing network of public health facilities.

The consortium managed a health network that provided services to approximately 375 000 outpatients and 23 000 inpatients headed by South African Netcare together with local investors and healthcare providers in an 18 year contract that commenced in February 2009.

Tšepong designed, constructed, partially financed, and now operates this network of public health facilities that includes the new Queen ‘Mamohato Memorial Hospital (QMMH) as well as three expanded primary health care clinics in the capital, Maseru.

The project cost approximately US $100 million and is financed through a combination of commercial financing by the Development Bank of Southern Africa, a government capital contribution and private equity failing to reach an agreement.

The separation that was announced by health minister, Semano Sekatle in a media briefing on Wednesday afternoon, emanated from a number of disagreements.

Sekatle announced that cabinet has made a decision to end partnership in this previously lauded PPP arrangement which saw the establishment of the QMMH. He said that the nursing staff that has recently been dismissed at the hospital shall be reinstated.

Sekatle added that the government will partner with other Basotho owned companies working at Tsepong to figure out a way forward to continue providing healthcare services to the public.

“The government is working on assuring all the health workers retrenched get their jobs back and also the government will engage in a discussion with Basotho companies working at Tšepong to find way forward in offering Basotho good health services” the health minister added.

The dismissal of the over 300 nursing staff at the hospital became the last straw in the long sour relationship between government, the hospital as well as its workforce.

And according to the QMMH publicist, Mothepane Thahane: “This dispute began in 2013 when the government increased the salaries of civil service nurses by an average of 50 percent.

Regrettably, the same salary increases could not be offered by Tšepong to nursing staff employed at QMMH and its filter (primary care) clinics.”

“Since then Tšepong management has been most concerned about the resultant unfair salary disparities and the un affordability of a similar increase given the current funding model and agreement entered into with the government.

Tšepong management and the board have since engaged the government in an effort to renegotiate the funding model and agreement to accommodate the 50 percent wage increases. Unfortunately, the negotiations are still ongoing, and the parties are yet to reach an agreement,” Thahane notes in a statement released a day before the health minister’s announcement.

Thahane added that staff at Tšepong initially went on strike in 2014 demanding a speedy resolution to these unfair salary disparities.

The strike led to a “Return to Work” tripartite agreement (LEWA Agreement) being entered into between Tšepong, the Ministry of Health and the Lesotho Workers Association on May 15, 2014.

As part of the LEWA agreement, the parties agreed that the Government would perform a salary structure and funding review, so as to enable Tšepong to afford the 50 percent salary increments.

Regrettably, Thahane continued, this undertaking has not yet been fulfilled. Without the adjusted funding the salary increments demanded by Tšepong staff, therefore, unfortunately remains unaffordable.

“In support of the staff’s demands, Tšepong management referred the matter for arbitration even before the most recent strike action. The arbitration process, which is reviewing the matter of salary disparities and other matters, is still underway.

The government is the sole funder of services provided by Tšepong, whereby specified services are provided for a pre-determined fee. Tšepong is, therefore, unable to unilaterally increase its fees for services provided, to make it possible for Tšepong to cover the salaries demanded. Tšepong remains hopeful that an arbitration ruling will persuade the government to provide restitution, should the arbitrator agree with the claim pursued by Tšepong on behalf of staff members,” explained Thahane.

Tšepong management has held parallel discussions with the Ministry of Health and presented alternative proposals in an attempt to expedite the resolution.

On February 17 a meeting was held between Sekatle and the Tšepong Board of Directors. Later Sekatle confirmed that the matter can only be resolved through arbitration and informed Tšepong that negotiations have been terminated.


According to Thahane, Tšepong subsequently held a special board meeting on February 22 attended by partners Afrinnai Health (Pty) Ltd, D10 Investments (Pty) Ltd, Woman Investment Company (Pty) Ltd, Excel Health Services (Pty) Ltd and Netcare Hospital Group (Pty) Ltd.

After deliberation and consideration of the facts it was unanimously decided that Tšepong had no alternative options but to maintain the terms of employment and continue with the arbitration process.


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