A ser­vice pro­vider sup­ply­ing pro­vin­cial state hos­pit­als is suing the gov­ern­ment in a bid to recover R360m in unpaid invoices, some from eight years ago, reports Business Day.

The legal suit adds more woes to the depart­ment, after the AG recently put eight provinces in the red for R24bn in unpaid bills.

Eco­nom­ist Prof Alex van den Heever has warned the pub­lic health sec­tor trend of non­pay­ment bank­rupts busi­nesses and could lead to com­pan­ies refus­ing to do work for the state.

African Oxy­gen (Afrox), which sup­plies med­ical gases to state hos­pit­als nation­ally, has turned to the Gauteng High Court (Pre­toria) to force the pro­vin­cial health depart­ments to pay R360m with accu­mu­lat­ing interest.

The com­pany, which has a sup­ply agree­ment with the National Treas­ury from 2017 to sup­ply med­ical gases to hos­pit­als, accuses all nine pro­vin­cial health depart­ments of being bad pay­ers and pins its lit­ig­a­tion on breaches of the Treas­ury’s reg­u­la­tion of a max­imum 30-day wait­ing period for pay­ment.

The East­ern Cape Health Depart­ment, which has a budget of R31bn in 2025/26, owes the highest amount of R90m, with some unpaid invoices dat­ing back to 2017.

According to Business Day, the 2024/25 AG’s Health depart­ments report showed the East­ern Cape had R7bn in accru­als (incurred expenses not paid).

‘Nego­ti­ations are cur­rently under way with the ser­vice pro­vider to final­ise a suit­able pay­ment plan,’ East­ern Cape health spokes­per­son Camag­wini Mavovana said.

The Gauteng health depart­ment faces a claim of R57m. The depart­ment’s accru­als in 2024/25 amoun­ted to R8bn, mak­ing it the province with the highest unpaid bills car­ried to another fin­an­cial year in the coun­try.

In the cur­rent fin­an­cial year, the depart­ment was alloc­ated R67bn.

The com­pany also claims the Free State has a debt of R28m, KwaZulu-Natal R34m, Limpopo R24m, Mpumalanga R15m, North­ern Cape R64m, North West R31m and the West­ern Cape R15m.

The West­ern Cape province is oppos­ing the applic­a­tion. Van den Heever blamed the non-pay­ment cul­ture in the pub­lic health sec­tor on polit­ical appoint­ments.

Full Business Day report