In a move to shake up South Africa’s empowerment landscape in KwaZulu-Natal, Indians and coloureds could in future be blocked from state contracts of more than R50 million.
According to the paper, it is being seen as a possible template for sweeping change in national empowerment legislation to incorporate the objectives of “radical economic transformation”.
The KwaZulu-Natal request, detailed in documents sent to the Treasury, makes it clear the aim is “to ensure there is economic transformation to benefit black Africans in the province”.
However, it also at odds with current legislation and practice, with Treasury reportedly denying the request as it would present constitutional issues.
Despite the setback from Treasury, Zikalala said that the provincial ANC would advance its view at the party’s national elective conference in December.
“We want to ensure that in a procurement, BEE is increased in favour of the Africans and blacks in general. This thing of defining blacks and Africans in general terms is also a problem . . . We must know who is an African and blacks in general,” he said.
BEE legislation, such as the Broad-Based BEE Act and Preferential Procurement Policy Framework Act currently defines “black” as Indians, coloureds, and Chinese citizens who were in South Africa before 1994, and black Africans generally.
Besides this reclassification, Zikalala also wants the province to be exempt from the PPPFA laws dictating the ratio between preference and price in public procurement, reports The Sunday Times.
When allocating points during evaluation, officials currently apply an 80% weighting to price and 20% to preference for tenders between R30,000 and R50 million, and allocate 90/10 for the respective weighting in tenders above R50 million.
KwaZulu-Natal wants to change these ratios to 50/50 and 60/40 respectively.
“Even though a targeted group may be afforded preference in selection process, it is still required to submit a competitive bid to secure a contract.
“Whichever way one looks at it, price is and will always be an important criterion,” states the memo.
You can read the full story in today’s Sunday Times.