DEAR Editor,-
Regarding the tender process in respect of the Beach Pavilion, the first question that came to my mind was: where was the transformation? Why was it thrown overboard by the Umdoni Municipality when initially considering the award of the tenders pertaining to the Beach Pavilion?
The former Chief Justice, Sandile Ngcobo of the Constitutional Court, stated at a seminar of the South African Legal Fellowship network – and I quote:- “Transformation, is the key to unlock these opportunities for previously disadvantaged and physically challenged individuals. This, in turn, would lead to exposure to these opportunities to Black people.”
To demonstrate the need for transformation, Judge Ngcobo quoted from the preamble of the Constitution which is the supreme law of our land:- “We need to transform our society as envisioned in the Constitution that introduced a new Constitutional order with values, which our democracy is made of. human rights are at the heart of transforming our institutions. We need to recognise that, at the eve of our democracy, we had one of the most unequal societies in the world that included unequal employment opportunities. The Constitution has put in place measures that are designed to address matters of the previously disadvantaged so that they can enjoy what the country has to offer. Transformation is required by the Constitution; however, the pace of transformation was incredibly slow.”
It is therefore essential that we assert a vision of transformation that is orientated towards the majority rather than the elite.
I refer to Section 217 of the of the Constitution of South Africa Act 108 of 1996 and quote Section 217 (2) which reads as follows:
Subsection (1) does not prevent the organ of the state or institutions referred to in that subsection from implementing a procurement policy providing for –
“(a) Categories of preference in allocation of contracts, and
(b) The protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination”.
In order to give effect to Section 217 (3) of the Constitution by providing a framework for the implementation of the Preferential Procurement Policy Framework Act of 2000 was enacted by Parliament.
According to the Preferential Procurement Policy Framework Act Regulations GNR 725 in GG 22549 of 10/08/2001, the definition of Historically Disadvantaged Individual (HDI) is as follows:-
“(1) Means a South African citizen who, due to the apartheid policy that had been in place, had no franchise in national elections prior to the introduction of the Constitution of the Republic of South Africa, 1983 (Act 110 of 1983) or the Constitution of the Republic of South Africa 1993 (Act 200 of 1993) the interim Constitution, and or
(2) Who is a female; and or
(3) Who has a disability:
I further quote from the said Regulations especially Section 9 of the said Regulation which reads as follows:-:
“9. Despite regulations 3.(4), 4.(4), 5.(4), 6.(4) and 8.(8), a contract may, on reasonable and justifiable grounds, be awarded to a tender that did not score the highest number of points.” This clause permits deviation from awarding a contract / tender to an applicant with the highest number of points to an applicant with a second highest number of points provided it is reasonable and justifiable and provided it met the criteria laid down in the statutes quoted herein and to give effect to the policy of Transformation.
I also refer to the BROAD-BASED BLACK ECONOMIC EMPOWERMENT ACT NO. 53 OF 2003 the Preamble of which is stated as follows:
“WHEREAS under apartheid race was used to control access to South Africa’s productive resources and access to skills;
WHEREAS South Africa’s economy still excludes the vast majority of its people from ownership of productive assets and the possession of advanced skills;
WHEREAS South Africa’s economy performs below its potential because of the low level of income earned and generated by the majority of its people;
AND WHEREAS, unless further steps are taken to increase the effective participation of the majority of South Africans in the economy, the stability and prosperity of the economy in the future may be undermined to the detriment of all South Africans, irrespective of race;
“The objectives of this Act are to facilitate broad-based black economic empowerment by inter alia:
(a) Promoting economic transformation in order to enable meaningful participation of black people in the economy;
(b) Achieving a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises;
REASONABLE AND JUSTIFIABLE GROUNDS: (SECTION 9 OF THE REGULATION)
Some of the grounds, for awarding a tender to the next highest bidder in terms of Regulation 9 (quoted above) and taking into account the recent awarding of contracts at the Beach Pavilion, inter alia, are:
1) The minimal rental required by the Municipality was R50.00 per square metre. Faurco Investment bid was for R94.62 per square metre and the other bidder was for R91.20; the difference was only R3.42, excluding VAT.
There is not much difference between Faurco Investments and the other bidder and in any event, there was no prejudice to the municipality as it was willing and prepared to accept a minimum of R50.00 per square metre; yet it inexplicably against legal precepts awarded the tender to Faurco Investments.
2) It appears that Faurco Investments had also bid for the Pub (ex Phat Boyz premises) and it tendered the price of R94.62, yet the award was made to Tholakele Maintenance Renovations Services CC which tendered the lower sum of R91.20 per square metre.
The Municipality in considering the ex Phat Boyz premises legally awarded the tender, not to Faurco Investment, the highest bidder, but to Tholakele Maintenance Renovations; notwithstanding the fact that the successful bidder was subsequently unable to meet the financial requirements.
It is somewhat surprising that Umdoni Municipality acted correctly in terms of the law pertaining to ex Phat Boyz premises whereas in respect of the Wimpy premises, the municipality completely ignored the imperatives of the law.
3) Faurco Investments or its shareholders were the previous tenants of the Wimpy and other premises for the last 23 years. In fact the Beach Pavilion was in the hands of the advantaged group since 1973. Faurco Investments or the previous shareholders were members of the advantaged group which controlled the country’s economy prior to 1994 and continued to be in that advantaged position even now, notwithstanding the policy of transformation and the other relevant statutes which tends to level the ‘playing fields’.
In terms of the B-BBEE Act the PPPF Act and Transformation, it is become desirable and imperative that blacks, who previously, under the apartheid regime, were excluded from the productive resources and access to skills, be elevated in the economic field to obtain economic freedom as well.
It is hoped that the Umdoni Municipality, in processing their decision in the future, on Procurement, takes into account what has been stated herein.
R Ramasar
