Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



South Africa: now making, assembling 50% of taxis


19 March 2013

South Africa has made significant progress in localizing the manufacture and assembly of minibus taxis, Economic Development Minister Ebrahim Patel said on the weekend.

“Some 12 months ago, none of the taxis on our roads were assembled in South Africa. Today about 50 percent of all taxis that are purchased are made or assembled here in South Africa, and we’re moving towards the target of localizing two-thirds of assembly in the taxi industry by 2015.”

The government is leading a campaign to promote the local procurement of supplies across all industries in order to boost the economy’s capacity to create jobs.

Patel said the Industrial Development Corporation (IDC) had been mandated to develop a national localization strategy to guide all spheres of government.

He said the labour-absorbing capacity of local manufacturing industries had to be boosted to stimulate job creation and economic growth, adding that a strong local manufacturing sector would have a positive impact on South Africa’s balance of payments.

“We are working in partnership with a major manufacturer, Toyota, who has expanded the factory in eThekwini, as well as a partnership with the IDC and a Chinese manufacturer called the Beijing Automotive Works that has started a factory in Gauteng.

These companies had already employed 220 people to assemble taxis locally, with the number set to increase significantly by 2015, Patel said.

In October 2011, the government, business, labour and community-based organisations signed a Local Procurement Accord committing the parties to work together to increase local procurement as part of South Africa’s plans to create five- million jobs over the next decade.

And in December, the government put the buying power of the state firmly behind local manufacturers, with new amendments to the the Preferential Procurement Policy Framework Act allowing the government to name sectors and products that require a minimum level of local content to qualify for state procurement.

Bus manufacturing was among the first batch of sectors designated for local procurement under the amended law, resulting in the local sourcing of 80 percent of all inputs and supplies in the manufacturing of bus bodies for the rapid public transport systems in Pretoria, Cape Town and Johannesburg.

Other products designated in the first batch included power pylons, rolling stock, TV set-top boxes, clothing, canned vegetables, footwear and leather products.

In January, the Department of Trade and Industry announced a second batch of designated products, namely electrical valves, manual and pneumatic actuators, electrical and telecommunication cables, and components of solar water heaters.

Combating procurement fraud in Africa and beyond

The Guardian


June 8th, 2012

At the Global Africa Diaspora summit, African officials came together to discuss how to clamp down on procurement fraud.

Most African countries have a poor track record when it comes to combatingprocurement fraud. But there are signs that this could be changing – at least in South Africa. At the Global Africa Diaspora summit, held in Johannesburg in May, I ran a course on procurement fraud.

One of the aims of the summit, which was supported by the African Union, is to encourage involvement in African affairs by Africans living outside the continent. Some of the delegates said that people were reluctant to invest in existing business – or to establish new ones – unless there was more certainty that money would be spent well and that procurement was based on the best suppliers, not corrupt systems.

The first step in addressing procurement fraud is to admit that it is happening and to then take action against offenders. This appears to be happening in South Africa, where national newspapers have been highlighting alleged misdemeanours by senior officials.

According to The Johannesburg Star, the Nehawu trade union has called for the temporary suspension of Humphrey Mmemezi, the member of the executive council for local government and housing in the Guateng province (which covers Johannesburg and Pretoria), pending investigation over alleged misuse of a corporate procurement card. The ANC is also calling for an investigation. While there have been some high-profile cases of individual abuse in the UK, a recent report from the National Audit Office said civil servants were able to abuse government-issued credit cards because of failure in oversight…Read more.

African Public and Private Sector Leaders Gather to Uncover Success in Public Private Partnerships and Project Finance

Press release

Neoedge Finance Edge to Hold Successful Public Private Partnerships & Project Finance in Johannesburg, South Africa on 24th-27th July 2012.

Johannesburg, South Africa, June 01, 2012 –(– The upcoming Successful Public Private Partnerships & Project Finance 2012 – Well researched and designed for African companies, to address all the critical issues on the role of Public Private Partnerships (PPPs) and Project Finance in developing public infrastructure in Africa, PPP contract mechanisms, sources of finance, risk analysis in PPPs, financial structuring of PPPs, Public-sector evaluation and procurement of PPPs, and PPPs in the power, transport and social infrastructure sectors.

According to Herman Zaidin, Head Consultant at Neoedge, “Africa is unique and this master class aims to begin with an in-depth understanding of how PPPs and project finance works, to contract mechanisms all the way to financial structuring and risk analysis.”

“We seek to push our participants to innovate with 2 group exercises. On the 4th day, we will see how PPP works in practice when we visit one of Africa’s largest PPPs, caleed, The Gautrain Project, to learn how they structure the project, its problems faced and the current situation,” Zaidin ended.

This master class will appeal to both the public and private sectors.

In the public sector, this masterclass will benefit officials from ministries of:
1. Finance, including PPP units
2. Transport
3. Power
4. Health
5. Public Works
6. Others

In the private sector, this course will benefit:
1. Bankers involved in infrastructure finance
2. Lawyers interested in improving their understanding of the commercial and financial background of PPPs
3. Construction companies and equipment suppliers interested in getting involved with PPPs

Zaidin envisioned, “Capacity building starts now. We need to understand the critical success factors of PPPs, how concepts translate into real progress, anticipate draining inhibitors, find effective solutions, learn from tried and tested best practices and most importantly, move beyond them and explore the avenues to innovate.”

Get more info and register online for the Successful Public Private Partnerships & Project Finance visit Neoedge’s event website.

About Neoedge Finance Edge

Neoedge is a top-notch business media and consulting company that aims to serve the corporate world with integrity and excellence by providing cutting edge business intelligences and creating high value networking opportunities.

Neoedge identifies pressing issues that the corporate world is facing. Neoedge events are developed based on careful and original research including extensive and direct interactions with potential participants in the market. Neoedge events are distinguished by delivering premier value to customers in a sustainable means.

Neoedge is headquartered in Singapore, Neoedge has been organising premier events all around the world including in Hamburg, Dubai, Accra, Johannesburg, Cape Town, Mumbai, Bangkok, Kuala Lumpur, Singapore, Perth, Manila, Hong Kong, Shenzhen and Shanghai etc.

Neoedge is your long term reliable corporate business partner.

Press enquiries:

Eugene Azucena, +65 6557 9185, email:

South Africa: Public Works to boost technical skills base

7th Space

Compiled by the Government Communication and Information System
Date: 21 May 2012
Title: Public Works to boost technical skills base

Pretoria – The Department of Public Works is set to invest more funds in developing in-house technical capacity, which in the long run will help it to save money that is currently paid to consultants.

This emerged after Minister Thulasi Nxesi met with Public Works MECs in Johannesburg over the weekend to develop strategies to enhance service delivery.

Among the issues discussed was the need to address the lack of professional and technical skills, given the fact that Public Works is a highly technical department.

This, according to the department, means recruiting from the private sector, as well as inserting clauses into construction contracts to require contractors to train young engineers and artisans. The department will determine the minimum basket of skills required nationally and provincially.

The discussions also centred on developing and capacitating emerging black construction contractors, whilst strengthening sanctions – including blacklisting – against non-performing contractors to enhance service delivery.

Also taking part in the meeting was the Construction Industry Development Board (CIBD) – a public entity which reports to the Minister of Public Works. CIBD is concurrently reviewing the regulatory framework to ensure it enhances, rather than inhibits, contractor development.

The meeting also explored the use of alternative construction methods (ACMs) to tackle the issue of mud schools. Pilot schemes have been completed in the Eastern Cape and North West provinces.

These methods produce buildings that in most instances are better than conventional buildings, in that they are more sustainable, cheaper and quicker to erect.

Nxesi also explained the implications of the recently announced national infrastructure roll out plans.

“The effective roll out of the Strategic Integrated Projects (SIPs) … the revitalisation of health facilities and the national school building programme, require that Public Works, nationally and provincially, together with client departments, local authorities and implementing bodies work closely together to ensure effective delivery.

“This means maximum coordination and changing the way we work to reduce delays and cut through the bureaucracy. The roll out of health and education infrastructure will also stimulate further economic activity in communities and job creation,” said Nxesi.

Professor Shadrack Gutto, constitutional law expert and public policy commentator, was invited to present a legal opinion and research findings on the application of cooperative governance and concurrent mandates, concepts which are central to improving coordination between the spheres of government.

He concluded that whilst minor legislative or regulatory changes might be necessary, much could be done administratively to strengthen coordination between the spheres, including developing a memorandum of understanding to clarify roles and responsibilities.

A resolution was taken to, among other things, request Professor Gutto to undertake further research, whilst joint structures are established to identify the areas that need to be covered in a memorandum of understanding and to encourage greater cooperation and interaction between provinces to share experiences and best practices.

As examples, the MEC of the Eastern Cape – where ACMs have been used to replace mud schools – invited other provinces to visit these schools, whilst the Western and Northern Cape provinces discussed cooperation to address skills deficits.

The national department will also coordinate with provincial departments to further enhance reliability of the Immovable Assets Register of state assets.

Reported by: South African Government News Service

S.Africa’s MTN slides on Iran corruption lawsuit


The MTN Logo
The MTN Logo (Photo credit: Wikipedia)

By David Dolan

JOHANNESBURG | Fri Mar 30, 2012 9:00am EDT

(Reuters) – Shares in MTN Group (MTNJ.J) slid on Friday after rival Turkcell (TCELL.IS) filed a $4.2 billion suit against the South African mobile operator, alleging it bribed officials and lobbied support for Tehran‘s nuclear program to win an Iranian license.

Turkcell, which lost the 2004 bid for the Iranian license to MTN, filed the suit in a U.S. federal court in Washington, accusing the Johannesburg-based firm of using its influence with Pretoria to arrange support for Iran’s military.

The Turkcell case threatens to tarnish the reputation of both MTN – a black-run company widely seen as a post-apartheid success story – and the South African government, including former President Thabo Mbeki.

It comes at a time when countries around the world, including South Africa, are under strong Western pressure to halt oil imports from Iran and cut other trade.

MTN, Africa’s top mobile operator, has said the claim is without legal merit and has accused Turkcell of attempting to extort money from it – an allegation the Turkish company rejects.

Turkcell’s suit, backed by a collection of alleged MTN internal documents including emails, invoices, memos and presentations, accuses the South African firm of a “staggeringly brazen orchestra of corruption”.

Turkey’s largest mobile operator alleges that under a strategic plan code-named “Project Snooker”, MTN used corrupt practices to win the license which had initially been awarded to Turkcell…Read more.

(Additional reporting by Jon Herskovitz and Pascal Fletcher; Editing by David Holmes)

Absa wants to reverse social security deal


By Nicola Mawson, ITWeb deputy news editor

March 16, 2012

AllPay, a subsidiary of big four bank Absa, is set to square off with the South African Social Security Agency (SASSA) and a competitor next month, over a R10 billion contract it alleges was awarded unlawfully.

AllPay argues SASSA’s five-year deal with Net1 UEPS Technologies unit Cash Paymaster Services (CPS), awarded in January to cover SA‘s nine provinces, does not comply with the necessary regulations and laws.

AllPay claims, in an affidavit filed with the court this month, that the “process followed by SASSA in awarding the tender to CPS is very deeply flawed”. AllPay’s application to have the award set aside is set to be heard on 11 April.

Net1 previously had a contract to distribute grants in five of SA’s nine provinces. AllPay had been handling payments in the Free State, Western Cape, Gauteng and Eastern Cape, for a decade.

Payment disruptions

AllPay argues the award to CPS does not comply with the Constitution, National Treasury regulations or the Public Finance Management Act and is “unlawful”. It says the 10 million beneficiaries will be prejudiced if SASSA goes ahead with the CPS deal, while the matter is pending before the court.

Earlier this month, Democratic Alliance shadow deputy minister of social development Emmah More claimed the change in service providers disrupted grant payments, despite government assurances to the contrary. She said hundreds of recipients did not receive payouts.

AllPay alleges that CPS’s bid did not comply with SASSA’s requirements and that AllPay’s score was inexplicably lowered. “SASSA has acted in a manner which is designed to secure a particular outcome which favours CPS.”

Millions lost

The document, penned by Charmaine Webb, AllPay Consolidated’s GM of sales and service delivery, supplements a February affidavit.

Webb alleges in the February filing that AllPay will “suffer severe prejudice and irreparable harm if interim relief is not granted on an urgent basis”. She says AllPay “will need to dismantle a massive infrastructure if interim relief is not granted”.

However, if the company is successful in its bid, AllPay will need to go through the process of setting up infrastructure again, says Webb. She adds that the company’s technology, logistics and security partners stand to lose about R7 million in income a month.

If AllPay does not get the relief it seeks, 553 temporary and permanent staff will need to be retrenched, which will cost Absa R26 million, writes Webb. In addition, Absa stands to lose anywhere between 1 million and 1.75 million accounts.

No disruption

Net1 VP of investor relations Dhruv Chopra says “there have been several further affidavits that have been filed since to respond to AllPay’s allegations in a comprehensive manner”.

Chopra says, while the matter is pending, CPS continues to implement the tender based on the contract terms it has with SASSA. “We strongly believe we won the contract purely on merit and that a proper procurement process was followed.”

At the time of the award, chairman and CEO Serge Belamant said: “We are overjoyed by the SASSA tender award and very proud of the confidence that SASSA has placed in our company and technology.”

Department of Social Development spokesperson Lumka Oliphant says it is “not in a position to comment on allegations that have not been tested in court”.

Oliphant says “in the meantime, we want to assure our grant recipients that the service will not be disrupted. They will get what is due to them every month.”

South Africa: Union says Prasa boss went off the rails


By Charles Molele

February 10, 2012

Lucky Montana, the group chief executive of the Passenger Rail Agency of South Africa (Prasa), has been accused of tender irregularities amounting to more than R1-billion and organising an unauthorised trip to Cape Town for his friends and associates. 

The damning allegations against Montana are contained in a dossier seen by the Mail & Guardian, which was compiled by the South African Trade and Allied Workers’ Union (Satawu).

Although it has not been proved that Montana has committed any wrongdoing, the union has demanded that he be suspended pending an independent forensic investigation because it believes he might interfere with an internal investigation.

According to the dossier, Montana allegedly went on a joyride to Cape Town with 10 female companions in September 2009 on a Premier Classe train and returned to Johannesburg by air. The trip is said to have cost R170 000.

Montana is also alleged to have awarded Siemens an R800-million tender in 2009 for passenger communication systems that was advertised only in Gauteng but awarded nationally. The dossier further alleges that he awarded another R800-million contract to Rainbow Construction for Doornfontein station in Johannesburg, but it was extended to other stations without following proper tender processes.

The union claims Montana also awarded celebrity consultant Ezra Ndwandwe R10-million as a change management consultant without following procurement policies. Ndwandwe said on Thursday there was nothing untoward in his remuneration and that he had delivered on his mandate…Read more.

New Rea Vaya buses to be SA-made, Joburg council assures

November 4th, 2011

The City of Johannesburg has launched a process to determine the ability of the local automotive sector to build the 134 buses required for Phase 1B of the Rea Vaya bus rapid transit (BRT) locally.

A meeting to provide more information to the industry will be held this month.

Mayoral committee member for transport Rehana Moosajee says the 134 buses – which includes 41 articulated buses – will be operated by a different company from the one managing Phase 1, and will cover a new route through the city, even though it will sport the same branding.

The operating company on the first phase, Pio Trans, includes taxi operators affected by the implementation of the Rea Vaya BRT along the Soweto to Ellis Park route. A crippling bus driver strike has recently halted services on this route for two months.

Phase 1B encompasses the second trunk route of the system, and will run from Noordgezicht to Parktown, and on to the Johannesburg central business district. The 18 km, ten-station project carries an estimated infrastructure cost of R1.2-billion.

The acquisition of buses for Phase 1 of the system was widely criticised as the 143 Scania people movers for this phase were fully imported, even though the company had assembly facilities in South Africa.

Moosajee notes, however, that this was done in order to deal with the “very tight time restrictions” to have the system operational for the FIFA Confederations Cup in June 2009.

“The mayoral committee had then already taken the decision that Phase 1B of Rea Vaya will have to be a catalyst, as far as possible, for local production.”

With Rea Vaya one of many BRT systems being rolled out across the country, national government has taken a particular interest in establishing a viable local bus manufacturing industry in South Africa – one larger than the assembly currently undertaken.

It appears the Department of Trade and Industry will, in December, designate buses for local procurement – meaning it would require government and State agencies to buy locally manufactured buses, as noted by Trade and Industry Minister Rob Davies in a speech at the Johannesburg Motor Show in OctoberRead more.

Lesotho signs $15bn water, energy deal


Lesotho Location.
Image via Wikipedia

News 24

October 28, 2011

MaseruLesotho has signed a $15bn renewable energy deal with a South African company in the country’s largest-ever private investment, officials said on Thursday.

“The project aims to harness the natural resources of wind and water in Lesotho’s Maluti Mountains to produce power that will be used by both Lesotho and South Africa,” Johannesburg-based Harrison & White Investments said in a statement.

The Lesotho Highlands Power Project (LHPP) will generate 6 000 megawatts of wind power and 4 000 megawatts of hydro-power – equivalent to nearly one-quarter of South Africa’s total current energy supply.

The scheme will create 25 000 jobs over 15 years, Lesotho’s natural resources minister Monyane Moleleki said.

Harrison & White Investments and the government of Lesotho will provide equity finance, while unnamed Chinese firms will provide loans, Harrison & White said.

“The project comes at a time in our history when our traditional income streams have dried up due largely to the global economic meltdown,” Moleleki said at the signing ceremony in the capital Maseru on Wednesday.

The project aims to generate power from the Maluti Mountains’ wind and water resources, mainly for export to South Africa, which completely surrounds the tiny mountainous country.

The first phase of the project is a 150-megawatt wind farm, with construction set to start next year.

The project will be Lesotho’s largest investment since its six billion euro Lesotho Highlands Water Project deal with South Africa undertaken in 1998.

South Africa and Lesotho in August agreed to launch the second phase of that project, with a new dam and a 1 000-megawatt power station expected to cost $993m.

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