Budget 2016: Spotlight on big contracts and tenders

Finance Minister Pravin Gordhan at a media briefing ahead of his budget speech. (David Harrison)

Finance Minister Pravin Gordhan at a media briefing ahead of his budget speech. (David Harrison)

In his highly anticipated budget speech on Wednesday Finance Minister Pravin Gordhan affirmed government’s commitment to root out corruption, and that it will turn the spotlight on big contracts and tenders.

He made it known corruption was an issue that was top of mind in delivering the budget for the coming financial year.

Before detailing the national treasury’s tax proposals, which are expected to bring in R18-billion in additional revenues for the 2016-2017 year, Gordhan noted that public tax compliance had been high. “I am deeply mindful that we have a corresponding obligation, as government, to improve the impact of every rand spent, and to eliminate waste and corruption,” he said.

New e-tender portal
Gordhan said that use of the new e-tender portal would become mandatory, “thereby enforcing procurement transparency and accessible reference prices for a wide range of goods and services”.

Additionally, initiatives of the chief procurement officer will be extended to include monitoring of state-owned companies’ procurement plans and supply chain processes, and reviews of contracts above R10-million to ensure value for money.

In a media statement issued by the national treasury on Wednesday, it said the office of the chief procurement officer had in fact been reviewing contracts above R10-million since June 2015 in its quest to ensure value for money and reduce wastage and irregularities in procurement.

The statement was in response to recent reports in the Sunday Times suggesting that Eskom, and its coal contracts, is being targeted for investigation.

In the statement treasury said the primary focus of the review was indeed on state-owned companies as they formed the backbone of the economy and that the “coal contracts of Eskom happen to fall within the category of contracts that are above R10-million”.

In his budget speech, Gordhan said the office of the chief procurement officer is mandated to achieve savings of R25-billion a year, by 2018-19, out of a government procurement budget of about R500-billion a year.

“Our reform proposals draw on a consultation programme last year that reached over 7 000 suppliers and 2 500 supply chain practitioners, and attracted over 27 000 responses to a national survey,” said Gordhan. “It is clear that we can achieve considerable savings to government, while also ensuring that procurement processes are streamlined and service providers are paid on time.”

Centrally negotiated contracts will be mandatory with effect from April this year, the minister said.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn


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