Gordhan: Chief procurement office coming

2013-02-27 15:12 - Sapa

Parliament - The process of setting up a chief procurement office (CPO) in the National Treasury has begun in earnest, Finance Minister Pravin Gordhan said on Wednesday.

Tabling his 2013 Budget in the National Assembly, he said the name of a chief procurement officer would be announced soon,

A project team, seconded from state agencies and the private sector, had already identified four main streams of work.

These involved immediate remedial actions, improving the current system, standardising the procurement of critical items across all government departments, and the long-term modernisation of the entire system.

Among the first initiatives of the CPO would be to enhance the existing system of price referencing.

This would set fair value prices for certain goods and services.

Secondly, it would pilot procurement transformation programmes in the departments of health and public works, nationally and in the provinces.

"National Treasury is currently scrutinising 76 business entities with contracts worth R8.4bn, which we believe have infringed the procurement rules, while SARS (SA Revenue Service) is currently auditing more than 300 business entities and scrutinising another 700 entities," Gordhan said.

The value of these contracts was estimated at over R10bn. So far 216 cases had been finalised, resulting in assessments amounting to over R480m being raised.

The Financial Intelligence Centre had referred over R6.5bn for investigation linked to corrupt activities.

Gordhan said he fully supported calls for appropriate curbs on officials doing business with government.

To complement this, the Public Finance Management Act would be aligned with the provisions of the Public Service Act.

Worldwide, special measures were being taken to oversee the accounts of what had become known as "politically exposed persons" -- public representatives and senior officials.

"I have asked that the FIC should explore how we might bring South Africa into line with these international anti-corruption and anti-money laundering standards.

"Taxpayers, and indeed all South Africans are understandably impatient for tangible change," he said.

In the present system, procurement transactions took place at too many localities and the contracts were short-term.

Consequently, there were hundreds of thousands of transactions from a multitude of centres.

"There is very little visibility of all these transactions. While our ablest civil servants have had great difficulty in optimising procurement, it has yielded rich pickings for those who seek to exploit it.

"There are also too many people who have a stake in keeping the system the way it is."

Government's solutions, hitherto, had not matched the size and complexity of the problem.

"As much as I want, I cannot simply wave a magic wand to make these problems disappear. This is going to take a special effort from all of us in government, assisted by people in business and broader society.

"And it will take time. But we are determined to make progress," Gordhan said.

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