26 JUNE 2018

MEC Creecy praises Open Tender system for saving government R1.2 billion

The Open Tender system saved Gauteng R1.2 billion in irregular expenditure in 2017/18 financial year by detecting non-compliance in 26 tenders that were cancelled before award; an indication that this innovation is working to promote clean government and transparency in the public sector, Finance MEC Barbara Creecy said.

The MEC was presenting the 2018/19 Budget Vote of Provincial Treasury to the Legislature today.

Since its launch in 2014, more than 75 projects with a combined value of R15 billion have been publicly adjudicated through the Open Tender system. In this financial year, all tenders that are valued at R2 million or more will be adjudicated through the Open Tender system.

MEC Creecy welcomed Premier David Makhura’s decision to refer all allegations of financial irregularities and financial misconduct raised in previous forensic reports of Provincial Treasury, but never acted on, to the Special Investigation Unit.

“Until those responsible for financial irregularities face consequences for their actions we will never rid the public service of this scourge!” she said.

The MEC also announced that interventions in the Department of Health have resulted in the payment of all service providers with accrued invoices of under R10 million. This positive development will contribute to improving the cash flow particularly of small businesses, enabling them to participate in efforts to grow the economy and create jobs.

On economic transformation, MEC Creecy said since 2014 more than 10 000 township businesses have been registered on Provincial Treasury’s central supplier data base and a total of R20.5 billion spent on procuring goods and services from these enterprises.

“In the period 2015/16 to 2017/18, provincial government also spent R45,9 billion on infrastructure development and maintenance. Over 90% of this has resulted in procurement from empowered companies in the construction and professional services sectors,” she added.

That said, MEC Creecy said there have been challenges in ensuring that major companies sub-contract 30% of the work to small local enterprises, and this has led to some infrastructure projects being disrupted by local business forums.

“Working with Tshepo One Million, Provincial Treasury is developing a process to mobilise local contractors, introduce them to main contractors and conclude a local working partnership that meets the criteria for 30% subcontracting. This will ensure that verified local artisans benefit from the infrastructure spend. We are in the final phase of project selection using this approach. As part of this process, a fair and transparent process was undertaken and a technical platform developed that will be used in the future rollout of infrastructure projects in the province,” she said.

Turning to local government, the MEC said in the period 2015 to 2018 provincial government paid a total of R4.7 billion to municipalities for rates and services. “This has drastically reduced provincial government debt to municipalities to less than 2% of all municipal debts owed for rates and services,” she said

MEC Creecy reiterated her deep concern about the impact of investments made by West Rand District Municipality and the Merafong Local Municipality in VBS Mutual Bank which is currently under curatorship.

“We will continue to work with National Treasury, Department of Cooperative Governance and Traditional Affairs and the affected municipalities to find ways to mitigate the impact of the suspension of these funds on municipal financial wellness,” she said.

On the issue of off-budget infrastructure financing, the MEC announced that Gauteng Infrastructure Financing Agency’s project pipeline has increased to 28 with a potential capital value of R40 billion.

“Construction has finally started on the Jewellery Manufacturing Precinct. The other important achievement in this regard relates to the signing of the agreement between the developer and the landowner for the development of the West Rand Logistics Hub which is a public to private partnership,” MEC Creecy said.

“Financial close is also imminent on the following projects: Lindley Waste Water Treatment Plant, Tshwane Innovation Hub: Enterprise Buildings, Rooftop Solar Panels, and Trigen Plant,” she added.

John Sukazi
MEC Spokesperson

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