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21 February 2012 | Adam Leach
The South African government is
consulting with representatives from the private sector and labour
organisations to implement a new ‘integrity pact’ in a bid to strengthen
competitive pricing and stop suppliers colluding to drive up costs.
In a speech on how the government
will improve the way it manages large infrastructure projects, the minister for
economic development revealed that it will work to stop price collusion so that
it can avoid having to take action at a later date to recoup damages.
Ebrahim Patel, economic
development minister, said: “Our experience in past programmes showed high
levels of collusion between contractors that drove up supplies and services. We
faced avoidable industrial action on some of the projects.”
Patel explained that his
department was working with industry to try to develop the integrity pact as
part of a broader accord to promote competitive pricing. While he admitted that
some of the actions taken were “avoidable”, he reiterated that offending
parties would be punished. He said: “The competition authorities are ready to
crack down on collusion and price fixing.”
During his speech, the minister
said that the results of an audit on scarce skills in the public sector had
revealed a particular shortage in the area of procurement. To address this, the
government is increasing the number of apprenticeships in the key areas of shortage,
forming a skills plan identifying HR requirements for each infrastructure
project and easing immigration rules on infrastructure-linked scarce-skills
To help meet economic development
aspirations, the government will also input small- to medium-sized enterprise (SME),
skills, local content and environmental targets in tender specifications.
Patel claimed that the
government’s plan can “set the platform which transforms our economy to make
‘Made in South Africa’ an aspirational label for manufactured goods”.