National and provincial government spends approximately R10 billion annually on travel and subsistence.
This is according to National Treasury, which noted that R4.5 billion is spent on domestic air and land travel and accommodation services, alone.
“Currently, procurement of the service is fragmented across all government entities resulting in duplication of effort and different pricing models,” Treasury said.
“There are more than 40 travel agents doing business with the state and R1 billion a year is spent on commission. Of the R1 billion three travel agents receive collectively R550 million
commission annually,” it said.
In addition, these travel agents do not pass on negotiated discounts to government.
“Further, in the absence of a national travel policy, travel behaviour is not efficiently controlled,” the national department responsible for government finances said.
From 1 April, 2016, a national travel policy will be implemented that governs public sector travel, Treasury said.
- A standard remuneration model for travel agents will be introduced;
- A panel of qualified travel agents will be put in place;
- Negotiated corporate air travel rates will be introduced;
- Centrally negotiated hotel and lodging rates will be put in place;
- A central contract for car hire and shuttle services will be implemented; and
- Further work will be done on the Travel and Accommodation strategy to include services such as a conference management system, approved tour operators and coach and bus hire.
These measures are part of an initiative by the Office of the Chief Procurement Officer, set up in February 2013, to centralise procurement and cut out corruption.
The department aims to save R25 billion over the next three years.
A progress report on the work of the Office of the Chief Procurement Office, published on Tuesday, said that procurement of goods, services and works over the next three years will amount to R1.5 trillion across all spheres of government.
“This is an enormous amount of money. Wisely and efficiently spent, it can be a great force for good.”
“Efficiently and cost effectively managed public procurement can, through intelligent strategic procurement strategies, accelerate quality delivery of services and at the same time contribute to economic growth,” the report said.