Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Economic development

Manhattan Corp awarded R160m Ethiopia EPCM contract

Mining Weekly

By Nathalie Greve

January 14th, 2013

JOHANNESBURG ( – Local mining services provider Manhattan Corporation would undertake a R160-million contract to build a 25 000 t/m carbon-in-leach (CIL) gold plant, in Mekelle, in Ethiopia, for industrial group Ezana Mining and Development.

The contract would see Manhattan supplying the gold plant on a turnkey basis and included design, engineering, procurement, shipment, construction, installation, implementation, after-sales skills development and support, with an optional offtake contract.

Work on the operation began earlier this month and the plant was expected to be operational by the end of the year.

The company added that the plant process would incorporate crushing, milling, leaching, carbon absorption, washing, stripping, elution, electrowinning and smelting.

“Manhattan is committed to incorporating Ethiopian suppliers, manufacturers and content to maximise job creation and economic development in that country,” Manhattan FD Theo Pouroullis said in a statement.

The plant would incorporate several innovative technologies, including optimised leaching and air-sparging, as well as adaptable feed to the comminution circuit to allow for improved plant availability, up-time and increased final gold production.

The technology provided incorporated CIL and carbon-in-pulp, which consisted of a series of tanks enabling adequate residence time.
The first two tanks would be used for leaching while the remaining six would be used for leaching and absorption.

Manhattan also recently concluded a plant expansion feasibility study for a Glencore subsidiary, in Australia, which involved an assessment of the increase in processing capacity for the operation and a reduction in the overall operating costs.

Additional recent projects included the development of a three-dimensional underground resource development and mine plan for the Manhattan-owned Gravelotte gold mine, in South Africa, which increased the resource from previous inferred resource estimates to a one-million-ounce probable gold reserve.

Edited by: Chanel de Bruyn

HBS Policy Brief: The G20’s Energy Infrastructure Plans for Africa: What is Missing?

At their Seoul, South Korea Summit in November 2010, the G20 adopted a Multi-Year Action Plan on Development which aims to promote economic growth, particularly in about 80 low-income countries. Infrastructure development is at the top of the nine-point agenda. In order to close Africa’s energy infrastructure gap, the group emphasises large-scale public-private partnership projects in order to promote economic growth and regional integration.

The G20 asserts that new investments into the continent’s energy sector are long overdue. This is true. However, Saliem Fakir (WWF SA) takes issue with the group’s call for delivering solutions with an entire focus on large-scale, centralised energy infrastructure projects. He argues that more attention should be given to modular and more flexibly deployable renewable energy technologies that can reduce poverty and minimise financial risk while maintaining a small carbon footprint.

Download the complete policy brief here.

South Africa: Government releases its Mid Term Review

7th Space

Compiled by the Government Communication and Information System
Jun 1, 2012

Pretoria – Government has officially released its Mid Term Review Report, which provides progress on the implementation of the commitments it has made.

November 2011 marked the mid-point of the 2009-2014 electoral term of the current administration and in line with that, the Department of Performance Monitoring and Evaluation carried out a Mid Term Review of government.

The report was released by Minister in the Presidency Collins Chabane, in Pretoria, on Friday.

The review focuses on government’s progress against the delivery agreements for the 12 outcomes. The outcomes are focused on national priorities such as education, health, crime and corruption, jobs and rural development.

The Department for Performance Monitoring and Evaluation has been monitoring progress on the implementation of the delivery agreements for the outcomes and reporting quarterly to Cabinet and the President.

Speaking about government’s priority of creating jobs, Chabane said although sufficient jobs were not created to meet the demand, government has made significant advances in the coordination of growth strategies, the New Growth Path and Stakeholder agreements.

“We have made progress with labour absorbing industrial development strategies in manufacturing, mineral products, procurement reform and the Jobs Fund. We have also made progress with improving competitiveness and reducing costs in minerals beneficiation, automotives and clothing.”

According to the report, significant procurement reforms to promote employment were achieved in 2011 with South Africa recording possibly up to 350 000 jobs in the course of the year.
However, the report notes, employment levels were still below those of 2008, before the recession with the current employment ration still well below the modest target of 45% by 2014.

The report notes that the Jobs Fund, announced by President Jacob Zuma last year, had committed only R425 million of its R2 billion budget for 2011/12.

The task of coordinating job creation initiatives across departments has proven to be challenging, resulting in slow implementation of decisions, especially where complex coordination is involved.

The report cites the problem of youth unemployment as among serious challenges facing the country.

“Government is taking a multi-pronged approach to youth employment. In addition to plans to stimulate higher growth that supports more entry-level employment opportunities, the strategy includes improved and affordable education, especially for young people from poor households; expansion in further and higher education and training; improved health care, with targeted programmes on teen pregnancy; early childhood development; and HIV and AIDS and career guidance and counselling,” reads the report.

It said a youth employment incentive, which is currently under discussion at the National Economic Development and Labour Council, had been proposed.

The National Youth Development Agency (NYDA) was in the process of finalising the National Youth Development Plan and the Integrated Youth Development Strategy for Cabinet, which focus on employment creation and economic participation by the youth. NYDA is said to have helped create 18 048 jobs in 2010/11.

During his State of the Nation Address earlier this year, President Zuma announced that the Industrial Development Cooperation (IDC) had by February this year approved R1.5 billion for 60 companies to promote job creation. This was part of the R10 billion set aside by the IDC for job creation.

With regard to increasing competitiveness, the report points to definite progress in the implementation of the Industrial Policy Action Plan (IPAP), and jobs drivers in some sectors, including minerals beneficiation, autos and clothing.

It highlights key developments in green growth through the implementation of a solar water heater programme and through commitments on renewable energy in the independent power producer (IPP) process.

Over 8 500 solar geysers were installed across South Africa during the two-week UN climate summit held in Durban with government targeting one million homes by 2014.

Reported by: South African Government News Service.

Chinese help Patel

Business report,

By Donwald Pressly

April 29, 2012

It is all about a masterplan called the developmental state where the various spheres of government and their agencies will work together to fast-track job creation, grow the economy and strip away any state fat in the process.

This is the vision for the country that Economic Development Minister Ebrahim Patel pursued during his budget vote in Parliament last week.

Earlier this year Patel, during the debate on the State of the Nation speech, noted that President Jacob Zuma had outlined a R1 trillion infrastructure plan that represented “a bold, strategic and integrated platform” to mobilise the state – with private investors and the South African public – behind “a clearly articulated storyline of South Africa’s opportunities”.

Last week Patel continued the storyline.

It was a week in which he announced a major deal with China, an expanded mandate for the Industrial Development Corporation (IDC) including the launch of a new subsidiary – the Small Enterprise Finance Agency (Sefa), which will focus on providing loans to small business. He reported the agency would have R2 billion in the lending kitty provided by fiscal transfers and reserves, and just short of a R1bn shareholder loan from the IDC.

In addition, the IDC had issued a R4bn jobs bond to promote lending to companies in a bid to boost job creation.

He noted that the IDC had introduced low-cost lending facilities for jobs creating projects “at prime less 3 percent”.

In the last year, IDC funding approvals had grown from R8.8bn to R13.5bn.

Ahead of his budget vote, Patel signed an agreement between the China Development Bank and the IDC. The bank will commit $100 million (about R777m) in funding for small business, which will be disbursed through the newly set up Sefa.

The latter is the amalgamation of three state finance agencies, which Patel emphasised would save about R20m just in reducing administrative red tape costs.

The Chinese loan will be repayable over 10 years and was the first “concrete partnership” arising from the Beijing declaration signed between South Africa and China in 2010, when Zuma went there on a state visit….Patel said the integrated platform required to mobilise South Africa’s talent and expertise was the first step in creating a 10- to 20-year infrastructure project pipeline.

His department took into account “the growing experience” in the state build programme for the Gautrain, Medupi and Kusile power stations, the freeway improvement programme and the major airport revamps.

He told journalists that the current procurement system of government was “purely transactional”. For example, his department had discovered that the file in which a recent speech was stored – on the need to buy South African products – was produced by a German company. These files were the cheapest.

After consultation with a local stationary company, Bantex, the Department of Trade and Industry and Economic Development were using local files and saving R100 000 a year. On top of it Bantex was getting the business and the new arrangement supported local jobs.

Turning to an expanded role for the IDC, he hinted that the corporation which had until now provided funding off the strength of its balance sheet, may turn to the state in future to make “contributions”.

The IDC, nevertheless, reported that it would be spearheading an over R100bn infrastructure investment programme over the medium term off its balance sheet.

Meanwhile, Patel acknowledged that the government had learnt a lesson from the massive bus rapid transport system procurement in the cities of Johannesburg and Cape Town, where they had separately procured buses from Brazil without benefiting from the economy of scale of having one bid. Long-term and pooling procurement procedures were the way to go, Patel argued.

Patel reported to MPs that of the R672m budget of his department, just short of R170m would be channelled to Sefa, which he said would help improve small business performance and strengthen its direct lending capability, while increasing disbursement.

To promote agriculture processing activities, Patel reported that R108m would be earmarked for the IDC for the agro-processing fund.

He also announced that the Public Investment Commission would manage a R5bn green bond issued by the IDC. It would have a 14-year tenure. Read the full article here.

Ten foreign firms bid to supply Zambia oil

March 30, 2012

* Current supplier Glencore among bidders

* 12 for separate diesel, petrol supply tender

(Reuters) – Ten foreign companies, including Glencore Energy UK Ltd, have tendered to supply oil to Zambia for a period of two years starting this year, the public procurement agency said on Friday.

The oil should be configured to Zambia’s 24,000 barrels-per-day Indeni refinery, which does not process pure crude oil.

Zambia in February invited tenders for the supply of 1.4 million tonnes of oil after the expiry of a contract with Glencore under a two-year arrangement from March 2010.

Hazel Zulu, the Zambia Public Procurement Agency spokeswoman said Mercury Energy Trading (SA), Agipol Africa Limited, Gunvor (SA) and Crown Hill Investments Limited had also put in bids.

Others are KenolKobil Limited, Trafigura PTE Limited, Vitol SA, Independent Petroleum Group Company of Kuwait and Addax Energy SA, she said…Read more.

Patel outlines new ‘integrity pact’ to screen firms for big-project deals


February 16, 2012

As the state ramps up its infrastructure spend, Economic Development Minister Ebrahim Patel has insisted on ‘value for money.’

Emboldened by a broadly positive response to infrastructure plans outlined by President Jacob Zuma last week, the government appears to be trying to use the contracts likely to be involved to further bend business and the unions to its “developmental” agenda and its view of how business and labour under a state-led mixed economy should behave.

Yesterday Economic Development Minister Ebrahim Patel said companies wishing to win contracts from the government’s infrastructure development programme would need to sign an “integrity pact” committing them to ethical behaviour, including noncollusion with competitors and competitive pricing.

President Jacob Zuma last week announced an expansion of Transnet’s infrastructure programme to R300bn over seven years. Added to existing plans — which in last year’s budget reached R809bn over three years — and new ones likely to be announced in next week’s budget, the government’s infrastructure spend is set to top R1-trillion.

But, having been burned by cost escalations in previous infrastructure programmes — particularly in the construction of Soccer World Cup stadiums in 2010 — Mr Patel says the government wanted to make sure this time it got “value for money”.

Investigations by the Competition Commission have uncovered “clear and compelling evidence of high levels of collusion ( with public-sector tenders) in construction, which has driven up costs”, Mr Patel told the Cape Town Press Club yesterday.

Speaking in the state of the nation debate in Parliament on Tuesday, Mr Patel said the government would guard against price collusion, corruption and unnecessary industrial action on infrastructure projects.

Our experience in the past showed high levels of collusion between contractors that drove up prices. We faced avoidable industrial action on some of the projects,” he said.

Mr Patel said the government was in discussion with business and organised labour “to address the need for competitive pricing, firm action against public and private sector corruption and co-operative industrial relations”.

In his remarks at the Press Club yesterday, he said he was under no illusion that such a pact would be sufficient to deter anticompetitive behaviour. The Competition Commission would “focus very strongly on the infrastructure programme”, and build on the “very substantial work” done in investigating collusion among construction firms.

The commission is investigating 65 bid-rigging cases in the construction sector with an estimated value of R29 bn.

Mr Patel said since the commission had altered its corporate leniency policy in 2007, awarding parties that are first to come clean, “the risks for private companies in colluding had got much higher”.

He said “clear consequences” would have to apply where contractors failed to deliver. In the inquiry, leniency was granted to Group Five and applications for leniency were made by Murray & Roberts and Grinaker-LTA.

In his state of the nation speech last week Mr Zuma said government procurement processes were being cleaned up by a multi-agency working group led by the Treasury.

This included a review of “the entire system” and “the vetting of supply chain personnel in all … departments”.

$38bn/y needed for African infrastructure to create growth platform

Star High Way Sign
Image via Wikipedia
August 4th, 2011

Political leaders attending the 13th African Renaissance Conference in Durban on Thursday argued that increased infrastructural connectivity between African countries should be prioritised, as it would create an important platform for social, political and economic development on the continent.

At present, only about 10% of African trade was intracontinental, while the balance was with countries in Europe, Asia and the Americas.

South Africa’s Public Enterprises Minister Malusi Gigaba argued that yearly infrastructure investment of $38-billion would be required over the next ten years to deal with the current deficits and to create the basis for greater trade and investment within the continent and with trade partners.

The bulk of the flows would be required to bolster energy capacity, but large logistics-related investment was also key to unblocking the current constraints to intraregional trade and to stimulating new agricultural, mining and manufacturing activities.

As a result of the lack of transport infrastructure, Africa has become a target in the global scramble for resources, but social and political integration must be lead by Africans themselves as those who are still keen on plundering the continent don’t have the will to help us solve our problems,” he said.

“However, without infrastructure, economic activity will be stifled.”

He pointed out that China had identified Africa as a target for increased investment, which had risen dramatically over the past decade. “But we must not be romantic because Chinese involvement in Africa is for its own benefit,” he said, arguing that South Africa needed to develop a strategy for engaging China in Africa…One of the problems facing the country was that financial institutions were not focusing on financing production. Also, too few of the investments in public procurements were stimulating industrial development.

“While trade with other Brics partners quadrupled between 2006 and 2010, this mainly involved primary products, an issue that the Industrial Policy Action Plan is seeking to address,” he said.

The country was currently making a number of amendments to its national procurement mechanisms and the New Preferential Procurement Act is due to be implemented on December 7, 2011. Davies said this would designate particular sectors for a range of procurement activities that would focus on local participation.

Government, he said, was working to introduce localisation into its new policies and to build in embedded suppliers.

Further, the Industrial Development Corporation had revised its business model and would disburse R102-billion over the next five years for investment into sectors that could support growth and new jobs…Read more.

Blog at

Up ↑

%d bloggers like this: