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Department officials found that hospital suppliers had been marking up linen by as much as 48%, Health Minister Aaron Motsoaledi has said.
Motsoaledi was speaking to journalists on the sidelines of a University of Stellenbosch Business School event on Thursday.
Last week, Finance Minister Tito Mboweni said during the mini budget that R350m would be reprioritised to recruit over 2 000 healthcare professionals, and R150m would be used to purchase beds and linens for hospitals in dire need.
At a briefing on the mini budget, Treasury Director General Dondo Mogajane told journalists the department would be sourcing the linen from a producer that employs disabled people in partnership with the labour department.
According to Motsoaledi, the department had in June sent out 200 officials to hospitals where the linen shortage was discovered.
"We agreed to buy linen centrally (at national government level) and then send it to provinces," he said. "[But] we discovered something that broke my heart."
Motsoaledi said only the Western Cape province bought its linen from the labour department's facility in Silverton, Gauteng. "We found an order from the Western Cape of 17 million. Where were the other provinces?" he asked.
Motsoaledi said the other provinces issued tenders for linen. "The person who gets the tender, gets linen from these disabled people and sells it to the state at (a margin) of 48%," he explained.
According to Motsoaledi, there were 12 of these factories across the country, generating a gross profit of R220m, of which R120m covered costs and R80m went back to the fiscus. Those employed by the factory eventually were removed from the social grants system, as they could start to earn an income and sustain themselves.
"I do not know why such an important structure should not be supported. That is why we insisted on it," he said.
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