Onderstepoort Biological Products (OBP), South Africa’s state-owned animal vaccine manufacturer, faced criticism from Parliament yesterday for its inability to provide clear financial details regarding its long-delayed Good Manufacturing Practices (GMP) upgrade.
Initiated in 2012, the project aims to modernise OBP’s facilities to meet global manufacturing standards, but progress has been hampered by funding gaps and outdated designs.
The Portfolio Committee on Agriculture expressed frustration over OBP’s lack of clarity on the required R893 million to complete the project.
OBP chairperson Professor Peaceful Mabeta and CEO Dr Bethuel Nthangeni conceded that outdated project designs and delays in appointing a Principal Agent to update specifications had stalled progress.
The GMP initiative, which originally requested R1.2 billion, received R492 million from National Treasury in the 2012/13 financial year. However, much of the funding has been spent, leaving only R153.4 million. OBP now seeks additional funding to complete the upgrade.
“We cannot give an exact costing at present because of the need to redesign. The project is on hold,” Nthangeni said, citing updated guidelines introduced in 2022 as a major challenge.
Committee chairperson Dina Pule highlighted discrepancies in OBP's figures, noting conflicting estimates from OBP, the Department of Agriculture and Parliament. “This facility is crucial for the country’s vaccine supply. If it’s not operational, it fails our farmers. We need accurate figures to ensure Parliament supports this project,” Pule said.
OBP reported some operational improvements, including a 67% reduction in backorders and the elimination of African Horse Sickness vaccine delays. However, issues persist with Redwater and heartwater vaccine supplies, it said.
Additional challenges include litigation with suppliers and clients, disruptions from unreliable power and water supplies, and a lack of solar and borehole infrastructure.
OBP also faces governance issues, including a forensic investigation into irregular tender and contract awards. This investigation revealed that the principal agent had been irregularly appointed, leading to legal disputes and stalled progress.
The Auditor General of South Africa issued qualified audit opinions for 2022/23 and 2023/24, citing repeated findings that remain unresolved. OBP also confirmed the suspension of its former chief financial officer over adverse audit findings, with its finance manager resigning amid policy violations.
Despite these setbacks, OBP has outlined a R2 billion, six-year capital expenditure plan aimed at stabilizing operations and enhancing its engineering and maintenance capabilities.
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