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Business body weighs in on Sanral policy withdrawal

A businessman sits and reads a business newspaper.

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Published Oct 26, 2023


Durban - The Black Business Council in the Built Environment (BBCBE) says while transformation is vitally important, it understands why the South African National Roads Agency (Sanral) withdrew its preferential procurement policy (PPP) that would have benefited emerging black-owned businesses.

Sanral on Tuesday said the policy was withdrawn to avert lengthy court battles brought by companies who had raised issues with the policy.

Danny Masimene, the president of the BBCBE, said while the organisation was concerned by the move, they understood the reasoning behind it.

“We as the BBCBE are in complete support of Sanral’s PPP. Broad-Based Black Economic Empowerment (B-BBEE) has not been able to achieve transformation, and we are almost 30 years into democracy. Some 93% of our country’s population is black, and unfortunately there hasn’t been enough transformation for those who were previously disadvantaged. We were engaging Sanral regarding the PPP, and are disappointed that it has been withdrawn.”

Masimene added, however, that they understood that it was withdrawn to avoid a lengthy legal battle with members of the industry.

“We do understand this is not the end as Sanral will announce a date on which they will consult the construction industry and all relevant stakeholders and will come back with a framework for the PPP. The need for transformation in the business sector is crucial, and we believe

Sanral has taken the right steps with the PPP, and they have our full support.”

Durban resident Malcolm Mitchell, a retired deputy director-general for the national Department of Transport and head of national roads, said the aim of developing emerging contractors was a laudable one, but not one that could be mandatorily enforced through the previous policy.

“I welcome the decision of Sanral to withdraw the PPP procurement policy since it will bring some normality to the provision of national roads, which as they say are the lifeblood of the country.”

Mitchell added that contractors need to be given time to grow in stages.

“All the major contractors now working on major contracts had small beginnings in the past and were built up to their current competence through sensible management involving mentoring efforts by competent and sympathetic professional engineers managing their early days. Additionally they were allowed to grow in stages, gradually building up the size of the projects they were allocated, and working as subcontractors to the larger contractors.”

Mitchell said the road industry was important to the economy, and the contracts that were awarded needed to follow the process.

“I am pleased to see that the views of the professional engineers in Sanral seem to have brought sense into the

contract allocation procedure and shown up the frailties of the advent of politics into such an important facet of our economy.”

Sanral board chairperson Themba Mhambi said that the decision to withdraw the PPP was taken by the board after careful consideration of developments since it was adopted.

“Following our adoption in May 2023 of a new PPP for Sanral, there have been a number of legal challenges to the policy that were launched by construction companies in various courts across the country. The legal challenges to the new PPP have regrettably resulted in Sanral being prevented from proceeding with the processing of close to 80 tenders worth billions of rand, with significant negative consequences for the fulfilment of the constitutional and statutory mandate of Sanral.”

Mhambi said that Sanral would continue to consult all its stakeholders.

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