SABS’ turnaround plan begins to deliver results
THE BELEAGUERED South African Bureau of Standards (SABS) yesterday told Parliament its turnaround plan had begun to deliver results on cost containment, revenue generation, and the optimisation of procurement processes while also revitalising crucial verification programmes.
Appearing before the Parliamentary Portfolio Committee on Trade and Industry, Garth Strachan, the acting chief executive of the SABS, said the turnaround hinged on a R300 million budget for capital expenditure (capex) of which R58m had been approved for the upgrading of critical testing infrastructure in the petroleum, chemicals and materials, agro-processing laboratories, R80m for the digitisation of business processes and the remaining R95m earmarked for maintenance of infrastructure which includes the National Electrical Test Facility in Olifantsfontein. He said the SABS had revitalised the local content verification programme and had identified 64 projects.
“In the six months under review the co-administrators had halved the trade deficit to R24m, filled critical vacancies and maintained the South African National Standard accreditation,” he said. Strachan said that the SABS Local Content Verification programme is still dependent upon an approved government funding model which could open new verification opportunities in the mining sector.
“As a result the SABS turnaround plan has introduced a risk based approach to Customer Specific Requirements testing. We still have a long journey ahead, but initial industry engagements have validated our decision. We call on industry associations and companies that still have unresolved matters to contact the SABS urgently,” he said.
The SABS was put under administration last year after it reported a R44.3m loss for its 2016/17 financial year amid stakeholder complaints. One of these is that it irregularly certified substandard coal by Gupta-linked mines to facilitate the suspension imposed by Eskom on another supplier to pave the way for the Gupta-owned Tegeta contract to go ahead. There had also been widespread criticism in the past few years from many industries about the level of service these industries were receiving from the bureau, including the coatings industry, which claimed the SABS’s paint testing laboratories appeared to be non-operational.
The Master Chemical Blenders’ Association, which collectively represents more than 50 companies, last year told Business Report that their members were unable to get their compliance certificates from the SABS.
Trade and Industry Minister Rob Davies confirmed to Parliament at the time that the SABS had lost 1 052 customers since its 2015/16 financial year, including 401 customers since April last year, resulting in a loss of revenue to the bureau of almost R50m in this period. In addition, the SABS had to refund 41 customers a total of R1.03m in this period.