House Chair
This version of the Public Procurement Bill was supposed to be a response to the Zondo Commission’s damning findings on preferential procurement that contributed significantly to state capture and corruption in state procurement.
The ACDP does not support preferential procurement provisions which have contributed to state capture and corruption and have grossly inflated government contracts.
This bill, we believe, is a missed opportunity to fundamentally address many deficiencies in the public procurement sphere.
Professor Quinot of the Stellenbosch University’s African Procurement Law Unit, noted with great alarm that these provisions are effectively a cut and paste of the PPPFA procurement processes and the 2017 preferential procurement regulations. He says it is exactly those provisions that led us to this law reform process that we are engaging in now.
The ACDP believes that it makes commercial sense to source goods directly from original equipment manufacturers rather than middlemen who are then appointed in terms of preferential procurement provisions. This has led to inflated prices (price gouging). To rather approach these contracts directly would improve financial and operational performance of SOEs, particularly Eskom.
The ACDP is also concerned that these provisions will embolden extortion syndicates who, under the guise of business forums, show up armed at construction sites demanding that 30% of the projects be subcontracted to them.
Stakeholders also commenting on the bill expressed concerns about the watering down of provisions relating to integrity and transparency. Harvard University’s Growth Lab, in its report on South Africa, made a very strong recommendation, that government should reconsider the implementation of BEE at all costs. It states that procurement regulations are the creator of a ‘tender-preneur economy’ which benefits only a narrow few at the expense of many.
The sharpest legal brains in South Africa came together pro bono to form the joint strategic resources to comment on the bill and suggest amendments.
The ACDP wishes to commend these lawyers and legal experts but it is sad to see the invaluable resource largely overlooked.
Curbing the high levels of corruption requires a change of heart, no only legislation. What is needed is servant leadership who understand stewardship of state resources and that those resources are not there to be looted and stolen by cadres in the ANC. The ACDP offers such leadership for next year’s elections.
I thank you.
