Network tender firms push up costs - MEC

2012-03-09 22:01

Bloemfontein - The government was worrying about business getting more expensive because of companies linked to networks getting government tenders, Free State Finance MEC Seiso Mohai said on Friday.

He said the government tender system made it possible for companies with these connections to get tenders even if they were not specialists in the required fields.

Mohai said the attitude of these tender businesses were things could be done within the network.

"This makes business expensive for government," said Mohai.

He was addressing a gathering of the Free State Black Management Forum (BMF) on infrastructure development in the province and how it could create opportunities for black businesses.

Mohai said many reputable businesses said they did not get government work because of these network companies.

The MEC said the tendency for "necessity-tenderpreneurship" was on the increase in the Free State.

More than 50% of service providers registered on the provincial government’s database had no special area of focus.

"They are registered as generalists who can do anything from catering to construction to cleaning," said Mohai.

He said the Free State would have spent more than R19bn by 2014 on infrastructure (since 2003), while spending on goods and services would be more than R55bn.

Mohai said the government had been consistent on the issue of public infrastructure development and preferential procurement in past years.

However, there were still problems with the capacity to plan and deliver infrastructure projects.

The MEC said the good transformation-oriented intentions of the government had not always been met with honesty and integrity on the part of black owned SMMEs.

Evidence of this was poor infrastructure delivery by service providers.

Many of these businesses had also leaked opportunities to opportunistic business people who were not the intended recipients of transformation policies.

He urged local black businesses to engage the provincial government on what could be done to benefit their businesses more and specifically local based business.

BMF chairperson Norbert Nyamsi said regular talks need to take place between the provincial government and the BMF.

"The BMF wants to be a partner with government in the province to develop it."

He said there was a positive attitude between government and the BMF to help each other in achieving success in the province.

Read more on:    bloemfontein  |  tenders  |  government spending

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