SA government urges suppliers to show integrity

21 February 2012

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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 categories.

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”.

 

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