Finance minister Enoch Godongwana has published new preferential procurement rules for tenders, bringing an end to a previous requirement that said companies could be disqualified if they were not 100% black-owned.
Eskom, Denel, Transnet, and other state-owned companies can no longer disqualify suppliers from consideration for tenders if they don’t meet black economic empowerment criteria.that finance minister Enoch Godongwana published new legislation for the Preferential Procurement Policy Framework Act on Friday, 4 October 2022.It previously specified that organs of state could disqualify bidding companies if they were not 100% black-owned.
The Concourt ordered South Africa’s new finance minister, Enoch Godongwana, to publish revised regulations within a year. Although not explicitly mentioned in the new legislation, there is a “special purpose” in the original regulations published in 2000 that allows for giving previously-disadvantaged groups preference.The regulations have hamstrung Eskom from procuring equipment needed to maintain its ageing power stations in a timely and cost-effective manner and getting additional power onto the grid.
But since the court ruling in February, over 700 state entities — including Eskom, Denel, Transnet, and various municipalities and state departments — have been granted exemption from the regulations.Former MTN and Microsoft South Africa chief executive Mteto Nyati, recently appointed head of the Eskom board’s business operations performance committee,“Procurement rules are not as agile as they should be, including rules which say you cannot use suppliers that are not local,” said Nyati.
“We need to remove costs from the equation. We need to make sure we are connecting directly with the people who have the knowledge that will get us out of this crisis as soon as possible,” Nyati said.
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