Marginalised and small businesses to benefit
Government to prioritise contracts
PRESIDENT Jacob Zuma is to directly oversee the strategy of all stateowned companies and any government interventions that might be necessary‚ through the creation of a special presidential coordinating committee that he will chair‚ the cabinet announced after its biannual lekgotla on Monday.
The lekgotla also made “radical decisions” on government procurement policy that will see the Treasury drafting new legislation to ensure that 30% of government contracts are set aside for small and black- and womenowned companies.
The lekgotla is a planning session for the cabinet feeding into the budget-planning process.
The decision to place Zuma at the apex of decision-making is noteworthy‚ as there has been significant tension within the government over state-owned companies‚ particularly between South African Airways (SAA) and Denel‚ and the Treasury.
Announcing the decisions of the meeting‚ Minister in the Presidency Jeff Radebe said on Monday the intention was to provide Zuma with “line of sight on strategic decisions and interventions to create state-owned companies that will play a transformative role in a capable developmental state”.
The cabinet also promised that by the end of the year it will have finalised a new shareholder ownership model for state-owned companies.
A second major development announced by the cabinet is that Treasury would develop a comprehensive Public Procurement Bill that would consolidate various procurement-related laws into a single piece of legislation.
The cabinet expects the draft legislation‚ which will include setting 30% of contracts aside for small enterprises‚ to be introduced by March next year.
Both decisions can be seen as a blow to the Treasury and Finance Minister Pravin Gordhan. Gordhan and Zuma have been engaged in a cold war over the choice of appointments to the SAA board for the past eight months‚ with the result that the company still operates with a minimal board. Zuma’s office denied on Monday that he and Gordhan were in disagreement.
The Treasury has dragged its feet on changes to the preferential procurement act on the grounds that setting aside contracts would have an effect on price and value for money.
Treasury spokeswoman Phumza Macanda said on Monday the proposed bill would fundamentally affect the current Preferential Procurement Policy Framework Act and its associated regulations.
“National Treasury will not comment on the contents of the draft bill at this stage because this is all work in progress.
“But‚ we can assure everyone concerned that a legislative process will be followed in legislating the Public Procurement Bill‚ which includes an extensive consultation process‚” Macanda said.
Pending the promulgation of the new act‚ the proposed preferential procurement regulations will for now apply. These regulations‚ published in June‚ raised the threshold for preference to black-owned companies from R1-million to R100-million.
The regulations also proposed that for contracts of more than R30-million‚ a minimum of 30% of the value to emerging suppliers must be subcontracted‚ including small, black-‚ womenor youth-owned enterprises.
The government wants to ensure these companies get a greater slice of the R550-billion it spends each year on procuring goods and services. The final regulations were expected to be submitted to Gordhan in September and could be ready for promulgation in October‚ said Schalk Human‚ chief director in Treasury’s office of the chief procurement officer.
Radebe said that cabinet hoped that the court action between Telecommunications and Postal Services Minister Siyabonga Cwele and the Independent Communications Authority of SA would be settled out of court.
The cabinet pledged that both the Integrated Energy Plan and the Integrated Resource Plan for Electricity will be finalised by end of 2016; and to step up monitoring of localisation targets in procurement. — BDLive