Public procurement has power to 'change a country', says Transnet executive

Will Green is news editor of Supply Management
29 July 2014

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30 July 2014 | Will Green

Procurement professionals must achieve the correct balance between commercial goals and socio-economic objectives, the CIPS Pan African Conference was told.

Edward Thomas, executive manager of integrated supply chain management at Transnet, said the company used minimum thresholds for local content in products and “punitive measures” for suppliers who did not adhere to them.

Giving an example, he said Transnet, a freight and infrastructure company owned by the South African government, required 55 per cent of components in a diesel locomotive be locally sourced and that it must be assembled in South Africa.

Thomas said freight in South Africa was forecast to grow by 153 per cent between 2011 and 2041 to 1,927 tonnes a year, while Transnet had a capital investment programme worth R312 billion (£17.4 billion).

“We don’t want to enable economic growth in the US or China, we want to enable economic growth in South Africa,” he said.

“We need to bring new players into the market. We need to bring skills into our country and not keep going overseas for those skills. We need to address the inequalities of the past.”

Thomas said procurement was involved when business cases were being drawn up, not after the scope of works had already been decided. “When we produce a business case we produce our sourcing strategy, and that includes supplier development,” he said.

“Government procurement can change a country, can be a catalyst for a country to be a net exporter rather than a net importer.

“If we as individual countries can focus and channel our energies we can achieve growth and a very strong economic future.”

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