DURBAN - KwaZulu-Natal has become the country’s trailblazer for radical economic transformation.
The provincial Treasury yesterday told the Daily News it has launched a revised Regulations of the Preferential Procurement Policy Framework Act (PPPFA) of 2017 to bring economic change to black African-owned businesses and communities.
The regulations will see small black African-owned businesses on a level playing field with businesses owned by other races, Advocate Siza Mthethwa, head of procurement in the KwaZulu-Natal Treasury, said yesterday.
The revised regulations prescribed new progressive changes that increased the threshold for the application of preference points during the tender processes.
For tenders between R30000 and R50million, an 80/20% principle applies, while the 90/10 principle applies in tenders valued above R50million.
“Government has a mandate to give effect to radical economic transformation. This, in essence means that the 80 points will go to the company that gives you the lowest price for the job. The 20 is for preferential points which are awarded in chunks.
“For example, if you are black, disabled and a woman, you are likely to get more points from that 20 than someone who is able, black and male,” Mthethwa explained.
He said that previously a 90/10 system was used on tenders worth over R1million and 80/20 used on tenders between R30000 and R1million. These regulations have changed the situation because the threshold has changed and the system now allows even young black African women who are disabled to contest for high bids, he said.
“We will be able to say to qualify for the tender, you must be a black African, youth and resident of the area of the project.
“Previously, African was defined as Black, Indian, Coloured and other.
“Recently, the provincial Transport Department presented to us that in about the past three years a huge chunk of the department’s budget for infrastructure projects went to Indian, followed by white-owned companies.
“Black African-owned companies fell at the bottom. If we don’t change that, we have a problem,” he said.
He said a number of systems were put in place to ensure that all companies sub-contract as failure to do this would lead to funds being stolen through shoddy dealings between government officials and contractors.
The department had started rolling out roadshows to all districts and government entities to empower all concerned on how to do business with the government.
During the launch of the regulations at the department’s offices in Durban on Monday, Treasury head Simiso Magagula said this move sought to pave the way for the majority of African service providers who “remain excluded” from the centre stage of economic transformation.
He said the regulations allow government to enforce partnerships between big and emerging businesses through sub-contracting.
“As far as radical economic transformation is concerned, this is not a milestone, but it is the beginning.
“The government is looking at the supply chain as the tool to bring about radical economic transformation for African enterprises. The status quo on the economic front remains.
“Those who were empowered before, remain empowered and government continues to empower them with the procurement expenditure that we incurred when procuring goods and services.
“The idea is to change that and focus on entrepreneurs who are black and African in general,” Magagula said.
Engagements between the KwaZulu-Natal Treasury, municipal officials and businesses on these new tender processes had started, with the first being held in KwaDukuza on Monday.