M a r k e t N e w s

South Africa: Trade and Industry Committee Held Colloquium On Local Public Procurement

Posted on : Monday, 29th August 2016

 The Portfolio Committee on Trade and Industry held a successful two-day colloquium on Local Public Procurement.

 
The Committee looked at policy instruments advancing industrialisation with specific focus on localisation and designations as they relate to Local Public Procurement. Committee Chairperson, Ms Joanmariae Fubbs, emphasised that industrialisation is central to government's plan for radically transforming the South African economy and facilitating job creation.
 
In terms of the transport sector, stakeholders making presentation included Transnet, the Passenger Rail Agency of South Africa (Prasa), the four Original Equipment Manufacturers involved in Transnet's locomotive procurement project and the Rail Road Association of South Africa. For broader industry, the Manufacturing Circle, and the Southern African Clothing & Textile Workers' Union (Sactwu) attended. In addition to these stakeholders, the Departments of Trade and Industry, of Science and Technology, of Transport and of Public Enterprises, were in attendance, as well as the National Treasury, CSIR and the South African Bureau of Standards (SABS).
 
From the government perspective, the importance of localisation and local public procurement was emphasised and industry highlighted their contributions in this regard through local supplier development and local manufacturing, in particular, components of the locomotives and the procurement of goods that are frequently used by the state.
 
The Committee welcomed strides made by these companies in developing local suppliers and creating jobs. The verification of local content took centre stage as questions around whether these stakeholders have gone through the SABS's local content verification process and the challenges of complying with the verification as stipulated in the Preferential Public Procurement Framework Act (PPPFA) Regulations. This requires all suppliers in the designated sectors to meet the set minimum local content requirements if they are tendering for goods, works and service contracts within the public sector. The objective of verification is among others to stimulate local manufacturing, technology transfer and commercialisation of local inventions. It also aims to grow the economy and create sustainable jobs in South Africa.
 
The discussion revealed there is an understanding that the verification is a requirement. However, the issue of who will pay, i.e. the winning bidder or the state, for this verification has not been settled, as this is perceived to be a costly process. The Committee emphasised the need for the National Treasury, in consultation with the Department of Trade and Industry (as the custodian of local procurement), to resolve the issue of funding the verification process and ensure that there is an amendment in regulation, if necessary.
 
The Committee further heard that there is enormous potential in local manufacturing, yet significant obstacles exist including the importation of goods that can be produced in the country.
 
Ms Fubbs said there has been significant progress in measures to leverage South Africa's large-scale public investment and procurement programme. However, compliance, supplier development, local content verification and import monitoring and export performance remained priorities.
 
She concluded the colloquium by highlighting the importance of greater collaboration between all stakeholders as well as a re-think of the policies regarding who pays for verification and welcomed the commitment by the Department of Trade and Industry and National Treasury to work on the challenges around this.

Source : allafrica.com
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