Pushing for tenders
Premier to introduce policy enforcing 30% share for local firms
EASTERN Cape business sector is taking Premier Phumulo Masualle’s ambitious policy which will enforce that at least 30% of government tenders be given to local businesses with a pinch of salt.
Border-Kei Chamber of Business head Les Holbrook said “unless we know who will roll this out and be responsible – it will not work”.
Masualle made the announcement while tabling his state of the province address in Bhisho last Friday, and set April 1 as the day to enforce the policy.
This, the premier said, would be coupled with a vigorous enforcement of the 30-day turnaround period to pay for services rendered.
The premier’s announcement comes on the back of complaints from local businesses over the dominance of companies from areas such as Gauteng, Cape Town and Durban in some provincial government tenders.
“We have spoken to the issue of 30% localisation, and that is the preferential framework that is to be unfolded as of April 1.
“We are almost unashamed to say let us be deliberate in targeting businesses that are situated in the province of the Eastern Cape,” said Masualle, while addressing the media last Friday.
Contacted for comment this week, Holbrook said if the policy is applied “there will be a tremendous positive impact.
“However for this to actually materialise, not all but a significant portion of Eastern Cape enterprises will need to pull their socks up.
“We lose business at the moment because we suffer from cost comparison or mark-up disease, poor service, lazy and complacent quoting,” he added.
Several mega projects are in the pipeline for the province. They include the Wild Coast N2 Toll Road (N2WCR), the Umzimvubu dam in Tsolo, a Port St Johns fishing harbour project and the Coega liquid natural gas fired power station, to mention but a few.
The South African National Roads Agency (Sanral) made an announcement last week that it will inject more than R120-million to train more than 31 small business as well as 300 youths as part of the multi-billion-rand N2WCR project.
The Daily Dispatch reported that Sanral’s Gcobani Socenywa said training would be given to labourers and small businesses that will work on the Mtentu and Msikaba mega-bridges, the new “greenfields” section of the road and maintenance.
Masualle said the East London development zone (ELIDZ) had “awarded R30-million of its total expenditure currently for SMME development”.
Masualle said his government will also “maximise local procurement opportunities and develop local suppliers and provide off-take agreements to promote employers of 100 or more people”.
Masualle said the IDZ and Eastern Cape Development Corporation (ECDC) had signed “new significant investment deals, promoted trade exports and funded new businesses”.
Some of these projects are in the automotive sector, aquaculture, as well as the energy sector. They include:
● Coega’s deal with 61 new investors to the tune of R35-billion;
● Volkswagen South Africa’s R4-billion car manufacturing deal; and
● An R11-billion investment by the Chinese automotive giant, Beijing Automotive International Corporation, which will produce up to 100 000 vehicles at its new assembly plant in Coega by 2018.
“Policy provisions have been put in place to ensure that service providers are paid within 30 days,” said Masualle.
But Holbrook said to start with, the conditions need to be very clear.
“Although we seek preferential opportunities, they should not be at the cost of huge cost increases,” he said.
He made an example of the cost of bottled water, saying it should be standardised.
“Anyone excessively profiteering from a bottle should not be given business. There should also not be huge differences between suppliers. Water is water!
“Furthermore, not just water but every single item, commodity or service should be compared. It is tax revenue that pays for every government procurement – including travel and accommodation,” Holbrook said.