Ministries, SOEs lead list of procurement culprits

Lewanika Timothy | Monday January 27, 2025 14:11

Under the law, tender committees in ministries and parastatals have far higher spending thresholds than local authorities and land boards.

The PPRA’s recently released Annual Report showed that public entities performed dismally in areas such as administration of retroactive approvals, where they scored an average of 26%. The processing of retroactive procurement refers to instances where services or goods are procured outside the scope of the procurement plan for which approval has not been granted.

This trend, which has been frequently slammed by authorities, often leads to a lack of settlement of invoices for which procurement was unprocedural, with the private sector bearing the brunt of non-payment and pursuit of the debt.

The PPRA also revealed that another major weakness with procuring entities was the failure to produce and submit end-of-activity reports. This failure means that there are no tangible reports that account for either delay in project delivery or even the perennial increase in procurement costs. The compliance rate for end-of-activity reports was the lowest at 17%.

Even where reports were submitted, the PPRA found issues.

“Limited information captured in the reports, hence making performance assessments difficult,” the authority noted.

Meanwhile, Minister of Finance and Vice President Ndaba Gaolathe vowed to give the PPRA its bite back, to enable it to clean up public procurement, particularly the controversial P13 billion development manager projects.

Speaking last Friday at a Budget Pitso held for local government authorities, Gaolathe said that the PPRA had become an absent watchdog, which he likened to a child who has been locked up in a room for fear of disturbing adults.

“The PPRA was supposed to be a watchdog in all matters relating to procurement,” Gaolathe said. “The truth is that the PPRA can be likened to a child who has been locked inside a room. “The PPRA similarly has been locked up because of fears of what it can reveal about the truth of procurement in this country.”

Under the suspended development manager model, selected major public projects were packaged and their implementation outsourced to private companies. At least 140 projects, all under the Transitional National Development Plan, were bundled under the development manager model and awarded to specific firms.

Nine firms were previously selected, mainly engineering consultancies, which carved up the country into zones and projects which they were to oversee through the appointment of private contractors, consultancies and others. Projects included hospitals, roads, schools, offices, prisons, stormwater drainage and others.

Gaolathe said that the PPRA was kept in the dark about changes in procurement procedures around the development manager model and was only reading about it from the newspapers “like any other citizen would”.

“The truth is that the PPRA, which is under the Ministry of Finance, has been blindsided from knowing much about procurement activities in the country. They have been reading about issues around the DM model from newspapers like any other citizen,” he said.

The Vice President vowed that the new administration was empowering the PPRA.

“In the new government, we have unlocked the door for the PPRA for it to perform its duties. “We have released the child from the room. “The PPRA has now begun peeping into matters it couldn’t look at. “My job was to open the door and I have done that,” he said

According to the recent Annual Report land boards achieved the highest compliance rates at 62% surpassing ministries, parastatals, and councils.

Councils, which scored 59%, scored poorly on institutional frameworks and were average on procurement plans an area, which proved problematic for parastatals and ministries.

In remarks accompanying the Annual Report, PPRA CEO Tumelo Motsumi said the regulator was enacting interventions such as capacity building and education to improve compliance.

“The implementation of the model structure, administration sanctions and more capacity building and education initiatives are expected to improve the level of compliance by public entities,” she said.