The South African National Road Agency (SANRAL) said although the majority of its multi-billion Rand tenders are being awarded to big construction companies it will continue to push for transformation in the sector.
The SANRAL statement comes in the light of a court interdict from some of the big construction companies which have dragged the road agency to court in a bid to halt the awarding of new construction tenders under the Preferential Procurement Policy (PPP).
However, Sanral CEO Reginald Demana warned that pending the outcome of the court battle, SANRAL might be forced to review its PPP but promised that they will still strive to benefit small business entities.
Demana said there are multifaceted interventions that the state-owned entity has proposed to ensure small medium enterprises also get a slice of the pie. One of them was to increase the level of subcontracting from 30% to 40%.
“So then, the small guy will be benefiting from that because that is the type of work they do. We also increased the level of points attributable to black ownership because inherently when you are evaluating these tenders usually you find that entities that are high up in terms of black ownership and indigency, tend to be the smaller guys.
“Not to say some of the big entities are not highly empowered. I am just saying that anecdotal
evidence shows that high black ownership usually will be the small guys with lower CIDB companies.
“So if you give more points as well in evaluation, they stand a chance to then get some of these tenders as well. So it is really a multi pronged approach. Increase points for black ownerships, increase levels of subcontracting so that those who don’t get the main contracts are still able to tender for the sub contracts within the main contract.
“So I will say that those are the key interventions that are introduced in the new triple PPP (Preferential Procurement Policy),” he added.
SANRAL also said the R7 billion bailout from the National Treasury was to finance its e-toll debt.
“On the bail out, I think to really put it into context, remember we have this ongoing e-toll debt of R42 billion or R43 billion. Somebody has to pay for that, it is debt that doesn’t go away. Somebody has to pay for that and we are just an agency of the government. We implement government policy. If the government says go borrow and build a road as we have done with these beautiful roads in Gauteng.
“We did that and we incurred debt. Some of it is guaranteed by the National Treasury. It remains government debt when it is due to be serviced, we are not collecting enough money from e-tolls. Government has said they are going to stop e-toll and therefore they will then help us to manage the debt repayment as required from time to time. It is not a bailout. It is really the government looking after the debt incurred to build infrastructure that we enjoy everyday in the Gauteng Province,” he added.
Earlier this year, the Gauteng provincial government scrapped the e-tolling system after fierce opposition from Gauteng residents and court interventions sought by the NGO – Outa..
The Gauteng provincial government said it will cough up more than 30% of the e-toll debt while national governments will finance the rest of the money.
