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South Africa: Government to Decide On Nuclear Procurement Process


allAfrica.com

October 1, 2014

Pretoria — The Department of Energy on Wednesday announced that government will decide on which procurement method will be used to acquire 9 600MW of nuclear power.

“… There will be a procurement process and the work that the department is doing is preparation towards that procurement process,” Deputy Director General (DDG) for Nuclear Energy at the Department of Energy, Zizamele Mbambo, said.

South Africa recently signed an Intergovernmental Agreement on Strategic Partnership and Cooperation in Nuclear Energy and Industry with Russia.

The agreement lays the foundation for the large-scale nuclear power plants (NPP) procurement and development programme of South Africa. This will be based on the construction of new nuclear power plants in SA with Russian VVER reactors, with total installed capacity of up to 9.6 GW (up to 8 NPP units).

At Wednesday’s briefing, the department said it is currently doing work in preparation towards the procurement process.

“We’ve highlighted that various models exist in the international space of the procurement process and South Africa would review all this and choose whichever procurement process it chooses to implement the nuclear programme. That decision will be made in the future,” said Mbambo.

Internationally, various procurement models are used and these are informed by the way in which countries want to roll out their nuclear programmes.

“This will apply to SA as well. Government will make a decision and say what is our national interest in rolling out this process,” said Mbambo, adding that the procurement process has not started.

South Africa has a number of nuclear agreements with several countries, including Russia and the US. SA is set to sign an agreement with France this month.

The department’s Acting Director General, Dr Wolsey Barnard, said that no information relevant to the public about South Africa’s nuclear build will be withheld.

South Africa’s nuclear energy policy was approved in 2008 and was further enhanced by the approval of the Integrated Resource Plan (IRP) 2010 – 2030, which stipulates that nuclear power will form part of the country’s energy mix to a level of 9 600MW.

“Some of the key elements of the policy revolve around the fact that as South Africa, we want to be self-sufficient. We want to be able to exploit nuclear technology for peaceful use purposes. Currently, people are focusing on the 9 600MW, which is mainly for the generation of electricity. But if you look into the process, the entire programme involves training, skills development and job creation [among others],” said Mbambo.

South Africa is looking at the entire nuclear energy value chain.

On how long will the procurement process take, Mbambo said that this will depend on the type of model that government approves.

He said the aim of the procurement process is to put the country on a path where there is energy security and to reduce greenhouse gas emissions, among others.

To date, South Africa generates 5% of its electricity from nuclear power through the Koeberg Nuclear Power Plant in the Western Cape.

At the centre of the new nuclear build programme will be a concerted localisation plan that will ensure that existing South African industry participates to the maximum extent.

The department said government is committed to ensuring that the new nuclear build programme is undertaken in a fair, competitive and cost effective manner.

– SAnews.gov.za

Uganda: Procurement Challenges Dog many Local Governments


NTV Uganda

The Public Procurement and Disposal of Public Assets PPDA, says that the procedures on contract awards and executions at local government levels remain weak. PPDA’s Director for Procurement Audit and investigation Benson Turamye  notes that the gap needs quick redress considering the Trillions of shillings in procurements handled by both the Central and Local governments.

South Africa Signs Agreement With Russia for Nuclear Power


Bloomberg News

Paul Burkhardt

September 22, 2014

South Africa signed a partnership agreement with Russia’s state-owned nuclear company that may see Rosatom Corp. build reactors in Africa’s second-biggest economy.

“The agreement lays the foundation for the large-scale nuclear power plants procurement and development program” using Russian VVER reactors with installed capacity of about 9,600 megawatts, or as many as eight nuclear units, Rosatom and the South African government said in an e-mailed statement today. The country also has a draft nuclear cooperation pact with China.

South Africa’s integrated resources plan envisions 9,600 megawatts of nuclear energy being added to the national grid to help reduce reliance on coal, which utility Eskom Holdings SOC Ltd. uses to generate 80 percent of the country’s electricity. The state-owned company is struggling to meet power demand,

The National Treasury said in February 2013 that a 300 billion-rand ($27 billion) nuclear program was in the final stages of study.

Areva SA (AREVA), EDF SA (EDF), Toshiba Corp. (6502)’s Westinghouse Electric Corp., China Guangdong Nuclear Power Holding Corp., Rosatom and Korea Electric Power Corp. (015760) have expressed interest in building the plants.

Local Procurement

“This agreement opens up the door for South Africa to access Russian technologies, funding, infrastructure, and provides a proper and solid platform for future extensive collaboration,” South African Energy Minister Tina Joemat-Pettersson said in the statement. It will allow the country to implement its plan to create more nuclear capacity by 2030, she said.

The collaboration will result in orders worth at least $10 billion to local industrial companies, Rosatom Director General Sergei Kirienko said in the statement.

In addition to building the nuclear units, the agreement provides for partnerships including the construction of a Russian technology-based research reactor, assistance in the development of South African nuclear infrastructure and education of specialists at Russian universities, the parties said in the statement.

Rosatom currently holds projects for the construction of 29 nuclear power plants, including 19 foreign commissions in countries including India, China, Turkey, Vietnam, Finland and Hungary.

Financial Implications

Eskom operates a 1,800-megawatt nuclear facility at Koeberg, near Cape Town. In December, the Energy Ministry published a revised 20-year energy plan, which projected that new nuclear power won’t be required until at least 2025.

If finalized, the deal may have significant financial risks and implications for electricity prices in South Africa, said Anne Fruhauf, an analyst at New York-based consultants Teneo Intelligence.

South Africa’s energy regulator last month approved a power-tariff increase that could amount to 5 percentage points on top of the above-inflation 8 percent previously agreed, and prices may have to rise even further for Eskom, which supplies 95 percent of the country’s electricity needs, to plug a 225 billion-rand funding gap.

“The million-dollar question will be the financing details and equity ownership,” Fruhauf said in an e-mailed response to questions. “We don’t have the details yet but it could be one of the biggest public procurement programs on which South Africa has ever embarked.”

To contact the reporter on this story: Paul Burkhardt in Johannesburg atpburkhardt@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.netAna Monteiro, John Bowker

Kenya Set To Resort To Online To Fight Graft


coastweek.com

NAIROBI, (Xinhua) — Kenyan President Uhuru Kenyatta said Wednesday he will set up a website in an effort to fight corruption which has retarded development in the East African Nation.

Kenyatta, who officially launched the 30 percent affirmative action of government procurement for women, youth and persons with disability in Nairobi, said the website will enable the public to report government officials who engage in graft, so that appropriate action would be taken against them.

The president warned public officials that his government will not tolerate graft, saying the days of corrupt officials in service are numbered and called for joint efforts to wipe out the vice.

“We have reached a point where if you want to keep your government job, you must be satisfied with the salary you are paid. If you think it is not enough, you are free to quit and look for other forms of employment,” he warned.

The warning came as the authorities took war against graft a notch higher in the most credible attempt so far to showcase Kenyatta’s acumen as a reform-minded African leader serving his first term in office.

The president also warned the Public Procurement Directorate to seal all loopholes that would allow corruption to compromise the procurement process, saying no laxity on their part will be tolerated.

He said he would closely monitor the allocation of the 30 percent government procurement to see exactly how many women, youths and persons with disability benefit.

 “For far too long we have characterized our women as people who are dependent. I want them to be people who we can depend on. Our youth were viewed as people who lacked vision and direction, I want to make them the engine that drives Kenya,” he said.

The president said if the 30 percent procurement allocation to the youth, women and persons with disability was replicated in all 47 counties and in the private sector, poverty would significantly reduce in the country.

Rwanda: 300 Awarded Certificates in Procurement Courses


AllAfrica.com

By Sarah Kwihangana

September 28, 2012

The School of Finance and Banking (SFB) has awarded certificates to over 300 students who have completed training in professional procurement courses.

The 2nd certificate awarding ceremony was held yesterday in Kigali under the theme “Twinning arrangement to develop capacity in procurement for Rwanda.”

The director general, Rwanda Public Procurement Authority (RPPA), Augustus Seminega said that training in professional short courses in procurement is in line with government’s plan to ensure good public procurement practices through skilled manpower.

“Initially, we had no institution offering such courses. I am happy that now our procurement officers can undertake such trainings here in Rwanda and, in turn, our employees acquire more skills,” Seminega said, adding that he was optimistic that the graduands will contribute to good practices to public procurement.

He called on the students to implement what they had learnt and also encourage their colleagues in the same field to pursue such professional courses. He further called for more people to take on these courses since there is still a wide skills gap especially in public institutions.

SFB acting rector Papias Musafiri Malimba underlined the need to create a critical capacity building in the field of procurement as it still lacks skilled professionals.

He appealed to employers to facilitate their employees to acquire such skills and called on the graduates to study all the seven modules of the professional procurement courses.

Jean Pierre Munyabugingo, a procurement consultant and one of the graduates who was also awarded a certificate of trainer, said he had acquired a lot of knowledge in the four courses he had studied under the program.

“I did a course in training of trainers, procurement for good, works and services. These courses are very practical and the knowledge I acquired is going to help me perfect my work. As a trainer I will definitely assist people and organisations where there is a need.”

Peace Asiimwe, an accountant with RPPA, received a certificate in project management and procurement planning. She says it was additional knowledge as an accountant.

“This course has broadened my understanding of procurement practices and processes. I have learnt about the laws and regulations, the process of getting a tender among other things which I intend to put in practice.” Asiimwe said.

Various students received certificates in different fields of; project management and planning, procurement for goods, works, services, audit, and logistics, advanced contract management, and of these seven were awarded certificates for training of trainers.

A law is in the pipeline to put in place an institution in charge of accrediting procurement officers in the country in a bid to enhance professionalism.

Swaziland finance minister announces procurement reform


Supply Management

29 February 2012 | Angeline Albert

This year, the Swaziland government plans to introduce a public procurement agency to oversee the purchasing carried out by public bodies.

In this national budget speech, finance minister Majozi Sithole said that the Swaziland Public Procurement Regulatory Agency will be created in the 2012/13 financial year.

As well as overseeing public purchasing, the agency will provide an independent forum to assess suppliers’ complaints. In addition, a code of conduct for public sector procurement officials will also be adopted.

The changes come as a result of the country’s Procurement Act of 2010, which gained assent from His Majesty King Mswati III last year. The act also disqualifies public sector workers and politicians from supplying government with goods and services.

In his budget speech, Sithole said: “Government understands that improving public procurement can generate savings without compromising services to the public. It is also an area prone to corruption. That is why we have a new procurement act. In 2012, the government will apply the changes required.”

The minister emphasized the need for stronger fiscal discipline in government by investing in cost-saving policies, improving procurement and public finance management and fighting corruption.

Does the procurement profession in Africa have the right profile to capitalise on the region’s economic growth?


SupplyManagement

8 August 2013 | Andrew Allen

Sub-saharan Africa has become one of the world’s great economic success stories. It is the second-fastest growing region in the world after Asia and, according to the International Monetary Fund, it will see growth of more than 5 per cent this year, compared with 3 per cent worldwide.

But is procurement missing the party? Academic Douglas Boateng indicates this may be the case when in a recent presentation he described the function as undervalued and under-rewarded across the region.

Professor Boateng, of UNISA Graduate School of Business Leadership in South Africa and CEO of consultancy PanAvest International, says government and industry increasingly accept the need to bring procurement into the strategic decision-making chamber. But, he adds: “The pontifications have unfortunately not really been matched by real corrective structural adjustments.”

In his view, procurement professionals receive less recognition as well as worse remuneration than counterparts in other business functions. These factors make it hard to attract talent. Lower pay also raises the risk individuals will act unethically.

The solution? Boateng calls on industry leaders and government policy makers to take “decisive steps” to “ensure respectable recognition for the ethically and performance-driven procurement and supply chain management professional”.

The remarks will strike a familiar chord for many procurement professionals in Africa. Chabeli Ramakatane, CEO of Bareki Consulting, South Africa, tells SM: “There is progress, however, it is not at the pace we expect. The highest-paid procurement person here is poorly remunerated compared to the highest-paid finance or marketing person.

“There is definitely a leadership vacuum. Even where you find capable leaders they might not be empowered to do what is necessary.”

At the heart of the problem is organisations’ reluctance to appoint a CPO who reports directly to the CEO and who has a strategic remit. Instead procurement tends to be located further down in the structural hierarchy led by a purchasing manager. “Fewer than 20 per cent of companies or large public sector organisations have CPOs,” says Ramakatane.

Naomi Kinyanjui, civil projects operations manager at Ardan Risk and Support, Kenya, agrees the function has typically been pigeonholed as a back office transactional role. “With regards to it being under-rewarded, that has been true to a large extent,” she says. But she believes that private sector organisations are increasingly beginning to pay their purchasing staff a fair market rate as they realise procurement can add value to their businesses.

Phillip Dahwa, managing partner, The Global Procurement And Supply Chain Management Practice, Zimbabwe, believes that if procurement is undervalued, this is precisely because the function has not yet earned its stripes. “The calibre of most procurement professionals is questionable in most instances,” he says.

While the professionals have technical skills they tend to lack business acumen, softer skills and leadership competencies. This, in turn, has denied them the chance to shine at the highest levels of their organisations, he believes. “The challenge is now for the professionals themselves to prove that they can add value rather than just purporting to be undervalued,” he says.

Skills shortages pose a problem for procurement everywhere, but Tom Woodham, director of Crimson & Co consulting, which works with many multinational clients in Africa, believes the talent pool in Africa is particularly small. Not only are there fewer business graduates in the region but procurement, like most business functions, is lagging behind many other regions in maturity “by about 20 years”. Nevertheless, Woodham does not consider buyers – at least in many of the larger multinationals – to be more poorly paid than colleagues in other business functions. In Africa the lack of prestige attached to procurement rather than lack of pay is the most serious obstacle to attracting the best talent, he believes.

“FMCGs and multinationals really struggle to find people to bring in both in terms of previous experience and of people with an interest in procurement.

“These companies spend an awful lot of money training people and they find they have to start from a lower base than they would in Europe or elsewhere,” he says.

Ulrike Kussing, at PwC in South Africa, believes companies are increasingly seeing the value in supply chain management. “Now there is more of a focus on looking at things end to end. The stance has shifted from the past where it was viewed more as a logistics function,” she says.

Nevertheless Kussing says that while supply chain managers can rely on modern technology and increasingly good infrastructure, problems such as facilitation fees and unreliable delivery times present a major challenge for supply chain professionals.

She is not alone in seeing significant grounds for optimism in the region.

Woodham says: “A lot of multinationals out there are changing their focus. Previously they would have brought in expats to fill vacancies. Now they are training and developing local people.”

For Ramakatane there is one factor that will guarantee procurement’s rise up the corporate ladder in Africa – that organisations will sooner or later come to realise the significant cost savings that can be achieved by implementing a strategic sourcing model.

“We expect organisations in both private and public sector to realise that the only place left to achieve savings or to improve the bottom line is in procurement,” he says.

Does low pay cause corruption?

“Most procurement professionals are not bold enough to stand up against fraud and corruption,” says Phillip Dahwa. “They facilitate corruption in an attempt to win the hearts of their bosses.”

It is a controversial viewpoint but one that African procurement professionals will understand.

Chabeli Ramakatane says the lack of visible punishment for buyers caught accepting bribes is a major incentive for fraudsters. He believes low pay bears some responsibility for the prevalence of bribery, as well as unmanaged conflicts of interest, inadequate screening of suppliers and just plain greed.

Naomi Kinyanjui says it is inevitable that low pay leads to increased temptation to engage in corruption.

However for Ian McNally, vice president of Efficio, it is not always clear where cases of ‘supplier loyalty’ within companies are due to corruption or rather “loyalty to a supply base that has delivered service and where the relationships are strong and long lived”.

“What we have seen is that in most cases, a clear, open, transparent, fact-based approach works with stakeholders in the same way as it works in a European or North American context,” he says.

Buyers must take responsibility for change


SupplyManagement

11 July 2013 | Adam Leach

The halls of Ghana’s National Theatre reverberated with a symphony of supply chain chatter at the CIPS Pan-Africa Conference. Procurement professionals from across Africa filled the grand structure to gain insights from leading lights of the profession. Over the two days, topics from countering corruption, transforming the function into a strategic asset and the growing importance of transparency were discussed. But between each issue, there emerged a common thread: the importance of the buyer as an individual.

The procurement profession in Africa faces a great many challenges. Public money being diverted to unwanted destinations remains rife and there is an ever-growing need to increase the value accrued through its plentiful supply of natural resources. The collective power and determination that was evidently infused in the delegates present served to show that things are going in the right direction. But as almost every speaker highlighted, the continued development of the function lies on the shoulders of individuals.

Edward Siwela, director of the Institute of Directors Zimbabwe, set an inspirational tone in his presentation, highlighting the potential for procurement to deliver at the highest level of business value. “There is no doubt that there is a major contribution that procurement can make to the overall strategy of a business.”

But in order for this to be realised, he admitted, the profession will need to make sure that those in power take notice. “If procurement is to play a key role, the board must take a keen interest in it.” Turning to the skillset demanded of modern procurement professionals, Siwela picked out risk management and IT competency as being of increasing importance. He also identified an ability to “handle difficult situations” as key in aiding the fight against corruption, which, if successful, could create significant value. “When [corruption and brown envelopes] disappear it can only mean one thing… value creation,” he said.

General manager SAP at Nigerian National Petroleum, Bola Afolabi also turned his attention to the issue of corruption, conceding to the audience of buyers that they would inevitably come up against people trying to gain an improper edge or benefit. He told them to be aware that if they succeed in getting into a powerful position, some, even close family and friends, might be thinking “what’s in this for me?”. Offering simple advice, he said: “You need to have that thick skin and be the best that you can be.”

With regard to corruption and other issues of risk, such as the detrimental effect on the local supply chain caused by going for a low cost but foreign supplier, the former CIPS president advocated that buyers be relentless in their search for potential issues: “Question yourself. Ask: ‘What is the risk in the role that I play? Look for the risk element in every level of the supply chain.” Outlining risks that commonly arise, particularly Africa, he pointed to incessant changes within government, a lack of keeping to payment terms and a failure to address potential conflicts of interest.

In one of the standout presentations of the conference, delegates were treated to the insights of a purchaser who has scaled all the way to the top of the corporate ladder. Babs Omotowa, who is now managing director of Nigeria LNG, told those looking to follow in his footsteps that success would only follow hard work. Boosting the strategic value of the function, he proposed, would only come if the profession took proactive action. “Procurement is yet to take its place as a strategic function. Buyers need to ask themselves whether they are spending more time on transactional or strategic activity.” If the measurement indicates a balance in favour of transactional work, it is encumbent on buyers to shift it towards the strategic side, he said.

In a further call for buyers to bring themselves closer to the centre of overall operations, Omotowa highlighted the need for them to develop a broader understanding of the ecosystem in which they sit. He urged them to “go beyond” the confines of procurement and factor in big issues such as societal and global matters into their own objectives. This, he proposed, would help overcome negative perceptions of the function from other parts of the business: “If you’re only concerned with procurement, no wonder other parts of the business don’t listen to you,” he said. In particular, he suggested that buyers swot up on politics, science and the global economy to enrich their perspective.

Tett Affotey-Walters, director of the Ghana procurement civil service, also cautioned against buyers becoming too focused on their individual goals and objectives rather than the overarching aims of their organisation. “It is not good enough for us as procurement professionals to only be reading procurement books,” he said. Ghana’s public sector chief also suggested that buyers earning the taxpayer pound, had suffered as a result of not having clearly defined career trajectories, when compared with other support functions such as finance or human resources. “In the Ghana Civil Service, there is no classification for procurement per se,” he said.

Tukiya Kankasa-Mabula, deputy governor of administration at the Bank of Zambia, used her time in the spotlight to impress upon buyers the pivotal role they can play in shaping the region’s economic development. She conceded that, currently, the reputation of the profession is not where many would like it to be. She said that procurement suffered as a result of being tagged as focusing too heavily on lowest cost. To remedy this, she urged audience members to work to a broader definition of value, factoring in the economic benefits afforded through local sourcing and boosting SME into purchasing decisions.

Taken together, the various traits, skills and competencies required in the modern African buyer, constitute a significant challenge. They must shake away the often unfairly attributed perception that they are concerned only with cost, by substantiating the value they have delivered in areas far harder to measure. Calculating contributions to local economies as robustly as a contracting saving is not easy work. They must also combine their more strategic understanding of how their own work impacts their organisation’s goals, with a clearer appreciation of what other teams are doing in order to improve stakeholder relations, a trick few in the profession have mastered.

Throw in the thick skin required to counter corruption and the booksmarts required to build currency with the board and it all adds up to a tall order. But if the energy and ambition that was apparent across the two days in Accra can be replicated in offices across the continent, there’s a strong chance it will be achieved.

– See more at: http://www.supplymanagement.com/analysis/features/2013/individual-action/#sthash.SmvxwpTT.dpuf

Tanzanian minister calls time on procurement corruption


SupplyManagement

28 June 2013 | Adam Leach

The United Republic of Tanzania plans to review its procurement legislation to close loopholes that make it possible for corrupt officials to profit from the public purse.

Addressing parliament this week, minister of state Stephen Wassira, pledged to take action to ensure items could not be purchased at inflated prices under the law, which results in unreasonably high profit margins for suppliers. As well as helping to reduce corruption, he said the more robust rules would boost competitiveness among businesses looking to supply to government.

Announcing his intention, Wassira, said: “The time has come to review the law. You can hide under the law and steal according to the law. If we do not act now and [instead] let corruption thrive, everything we buy or make will be substandard. And if we continue like this we will erode development.”

Around 70 per cent of the country’s development budget will be channelled through public sector procurement. The minister used this to strengthen the case for ensuring regulations are tight and robust.

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