Public Works' Macpherson says govt may need to reconsider tender policy around BEE companies

JOHANNESBURG - Minister of Public Works Dean Macpherson said that government may need to reconsider its tender policy, which stipulates that 30% of large contracts must go to small Black Economic Empowerment (BEE) companies.

Macpherson said that this policy had been exploited by the construction mafia.

The minister spoke on Tuesday at the launch of Infrastructure South Africa's multi-million rand fund, which is aimed at assisting government entities with project preparation.

It has been widely reported that when construction mafias approach contractors, they demand 30% of the tender.

The 30% rule comes from the Preferential Procurement Policy Framework Act, which mandates that tenders worth over R50 million must be subcontracted to a company owned by a person from a historically disadvantaged group.

Macpherson said that the construction mafia had misrepresented this to the detriment of all business owners.

"So, the question we need to contemplate at the summit is how do we bring back into construction projects, small and medium-sized businesses that legitimately deserve to participate in government's infrastructure plan, instead of just putting a monetised number that the mafia looks for."

Macpherson said that an inter-ministerial summit on how to address the construction mafia would take place in November in Durban.