Mal Ossie Gigaba has graced the hypertexted (and password protected) BDLive again. This time he was addressing the BMF.
Mr Gigaba briefed the forum about business opportunities arising from the development of the Durban-Free State-Gauteng logistics and industrial corridor, which is the second strategic integrated project (SIP) of the national infrastructure plan. It is the most important economic corridor in the country. He said changes to legislation, including a review of the Preferential Procurement Policy Framework Act, were vital to hastening the expansion of a black industrial class in South Africa.
The act has drawn sharp criticism from black business groups and even state agencies which believe the government's overwhelming bias towards price in evaluating tenders restricts the potential to develop new industries and supply chains. Programmes of sufficient scale, they said, were worth paying a premium for, because of the benefits they could bring to long-term economic development.
"We are persisting in our effort, working with other government departments, to seek a review of the act in order to be able to achieve the goal of faster and more radical empowerment," Mr Gigaba said.
His comments were welcomed by the Black Business Council (BBC), which has said it is impossible for black-owned companies to compete with large firms when it comes to doing business with the state.
Funding was a key concern, BBC CEO Xolani Qubeka said. The act in its current form was "antitransformation". His criticism is based primarily on the 90:10 (price to socioeconomic ratio) gauge used for the adjudication of tenders.
Mr Qubeka believes the act should be replaced by "set-asides" of 40% of the work for black firms. A normal tender process would determine a winner, and would ensure that high standards are adhered to.
And the keywords are shot around the room. Radical empowerment, antitransformation and set-asides. Radical Empowerment and set-asides are unfortunately blocked by the PPPFA. Hence it's a useless act (according to the VERY EXCLUSIVE Black Business Cabal). Strangely though there is some merit to what he says, I think the idea of the state paying a premium to create sustainable black businesses that pay taxes and employ people is a good idea. It's a pity that it's limited to only black business but that's an argument for the next millennium. But even the least jaded person knows that these best intentions will amount to nothing. The very connected (many of whom are prominent members of the BBC) are just going to get even richer through entitlement and the poor will, well remain just that. .
I need to understand this whole process. It is an election year, one that hopefully results in the ANC taking a complete pounding at the polls. Rhetoric like this is aimed at those disgruntled African people who can see the ANC for what it is and have drifted away from its rudderless boat. It's a nice promise – we'll change the law to make sure that you as a black (read African) person will win many state tenders and become rich. You won't even have to compete on price or capability, it will just land in your lap. In the case of set asides, it'll only be black people bidding on these which will limit the competition even more. Money for jam, hey Sandile.
BUT – the PPPFA just keeps getting in the way. Not only the PPPFA, it's also the PPPFA's gatekeeper Treasury that keeps on preventing these poor and disgruntled Zungs from walking in and grabbing their entitlement, which is state business. The PPPFA has to go. The BEE codes have already promoted black businesses to a level that no other company will ever be able to compete with. Why can't the PPPFA do the same. As an aside you'll see that all of this activity is directed at state procurement and not private. I am almost sure that the private sector has little regard for the BBC because they add little value to anything. Wealth for the Zungs can only be created on the coattails of the state – and with those relationships in place the Zungs can then become the middle agent for the private sector. Everybody wins. But the PPPFA won't allow this!. You see if you outsource more than 25% of the contract to another party they have to have a better or equal BEE score than yours. Let's say you are a 100% black owned company turning over R49,999,999.99 you are automatically a level one contributor. Where on earth are you going to find a white-owned company that can vaguely compete with that? The answer is nowhere. The new codes have made it impossible to get to a level 7 let alone anything else. No – that PPPFA has to go!!!!
And the other BUT – in order to get rid of the PPPFA you need to change section 217 of the Constitution (how many times have I written about this). You could do what Rob did with the new BEE codes, just gazette them even though they do not talk the BEE Act, the BEE strategy and by association, the Constitution. But there's a problem here – those irritating white businesses will notice what you're trying to do and go to the Constitutional Court and get your amended PPPFA thrown out (as I hope to do with the new BEE codes). So what we need to do is get to the source of the problem and remove it – the Constitution (which includes section 217). Perhaps we should start with section 217. Yes, but to get rid of or amend section 217 you must have a 2/3rds vote.
Everyone knows that the ANC does not enjoy that kind of majority. Even if they did get a 66% majority the party is so factional that they'd never get the support they need. Now you understand why Zuma is asking for a 90% majority. It's simple it allows for a 23% fallout on the vote and the ANC can still push it through. And they'll do this in the name of service delivery. Although I think that a lot of service delivery issues arose as a result of dodgy tenders anyway. But you must remember that the ANC owned the Independent news group (via OddBall Survey – more on this to come), the New Agenda (which is just useless), ANN7 (which is no longer as entertaining as it used to be) and the SABC. The latter is the most dangerous, like the Nats the ANC will only broadcast pro-ANC news. Pro-ANC news is a refutation of all anti-ANC allegations.
And this is what scares me. Are we aware of what is going on in parliament? Zuma has five years left – which means that the Zungs really need to up the ante when it comes to milking the state. And they will do just that . They'll either push it through like they did the Secrecy Bill or they'll do what Rob the Red did with the BEE codes. There is stuff going on around us and we need to keep a watchful eye out. If we don't they will bleed this country dry.
It all starts with a populist remark made at a BMF meeting.
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