‘Mafia’ 30% not true

National Treasury says there is no evidence that the rise of the so-called construction mafia, which has hampered several projects across the country, was an unintended consequence of its regulation implemented in April last year.

The regulation requires 30% of projects to be awarded to local subcontractors, which has seen community members violently demanding contracts, particularly at SA National Road Agency Ltd (Sanral) construction sites.

Treasury says it was not aware of this: “There is no evidence to substantiate this assertion. Paragraph nine of the Preferential Procurement Policy Framework Act (PPPFA), 2017 clearly indicates only if it’s feasible to subcontract, the institution may consider subcontracting. Therefore it’s not true the PPPFA Regulations, 2017 require 30% of projects to go to local subcontractors.”

According to Treasury, the Office of the Chief Procurement Officer last year “conducted workshops on the PPPFA Regulations, 2017 throughout the country and participated in many interviews, including community radio broadcasting in vernacular languages, to inform small businesses and contractors doing business with the state or intending to.”

Sanral has resumed awarding design contracts after Treasury in February gave clarity on the inclusion or not of “provisional sums” in the price for bid evaluation purposes.

On this matter, Treasury said the issue of provisional and prime cost sums was about how these provisional sums were applied in practice.

In other words, both in terms of the 2011 definition and the 2017 definition, there are instances when provisional sums are included in overall price and instances where they are not. Sanral engineering executive Louw Kannemeyer says Sanral has since awarded more than 10 contracts and another 15 to 17 will likely be awarded next week.