Financial Mail and Business Day

Treasury to check draft bill — minister

Linda Ensor Parliamentary Writer ensorl@businesslive.co.za

The Treasury must tackle issues raised in the first Zondo inquiry report and a Constitutional Court ruling before it publishes the draft Public Procurement Bill, finance minister Enoch Godongwana said in parliament on Thursday.

The draft bill to codify the entire government procurement process was due to be tabled with the budget on Wednesday, but was held back by these two aspects, Godongwana told members of four parliamentary committees before a budget briefing by Treasury officials.

The first report of the Zondo commission of inquiry into state capture dealt extensively with the limits of the existing public procurement system.

Last week, the Constitutional Court ruled that the minister exceeded his powers by excluding businesses that are not black-owned from tendering for government contracts. The court found that organs of state must determine their own procurement policies.

The case was brought by business lobby group Sakeliga.

“In the light of that, we want to take a look at the current public procurement bill after studying those two new developments,” said Godongwana.

The aim of the proposed bill is to eliminate fragmentation in laws dealing with public-sector procurement, including the Public Finance Management Act and a raft of Treasury regulations on supply chain management.

It will create a single regulatory framework for procurement by national, provincial and local government, as well as state-owned entities (SOEs), and will open the way for a revamped system of preferential procurement.

There is a plethora of laws dealing with public procurement, which has led to uncertainty about which law is applicable, and inconsistency in interpretations. The system is seen by the Treasury as inflexible and incoherent, and it has hampered development and service delivery.

The draft bill will also contain a framework for preferential procurement. It was published for public comment, and the Treasury received more than 4,000 submissions that it had to work through.

Godongwana told MPs that the Treasury would issue new instructions in the next 14 days, giving more flexibility and power to accounting officers.

“It enhances the reporting requirements to national, provincial treasuries and the auditor-general,” he said.

MPs questioned him and his team on a wide range of issues. On the introduction of a basic income grant, Godongwana said there was a need to review the entire grant system and then consider what was appropriate.

“If such a review leads to a higher [amount] than what we are currently funding, South Africans must be prepared to pay taxes. It is a decision which is going to be biting on us as we will have to pay the taxes in order to support that.

“We hope that by the time we have reached the MTBPS [medium-term budget policy statement], we would have canvassed a view in cabinet which we can place on the statement.”

Godongwana conceded that the fuel price was a problem, with more than 40% of it consisting of administered prices. Government was looking at this.

He also said the cost of e-tolls could not be added to the fuel price as this “blunt instrument” would add another “massive” 74c on to the petrol price.

Different e-tolls options had to be looked at, but Godongwana insisted that, in his personal view, the user-pays principle must be adhered to.

On SAA, the minister said that the Treasury was evaluating the submission by the department of public enterprises for R2.7bn for the airline.

NATIONAL

en-za

2022-02-25T08:00:00.0000000Z

2022-02-25T08:00:00.0000000Z

https://bd.pressreader.com/article/281612423846822

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