Tender Outsourcing Not Possible But 'prescript Departures' Exist - Transnet

Transnet cannot outsource its tender procedures but has secured certain departures associated with government prescripts on procurement from National Treasury, the state-owned company SOC responsible for logistics has said.

Responding to a set of questions about procurement, the utility said as an SOC it was subject to the Public Finance Management Act PFMA, and is consequently subject to prescripts regarding procurement processes and decision-making.

These prescripts do not allow for a wholesale outsourcing of our procurement function'.

Transnets comments come after Vuslat Bayoglu, managing director of investment company Menar, told the Sunday Times : Fixing the procurement system at the SOC might require outsourcing tender processes to independent experts, especially on large contracts that have huge implications for the whole economy.

Despite being subject to the PFMA of 1999, Transnet said the departures it had received from Treasury will enable expedited and/or urgent procurement as well as enable much-needed partnerships and cooperation with customers and the private sector where procurement impacts revenue-generating operations.

The utility also said that it intends optimising the opportunities that these departures present.

In addition, regarding its private sector participation initiatives, Transnet will also benefit from the support of the Department of Transports Private Sector Participation Unit and specialist transaction advisers'.

According to Bayoglu, Transnet's debt of R134.7 billion by the end of 2024, which is anticipated to rise to R151bn by the close of the current fiscal year, will impact the much-needed procurement at the parastatal, which has long been plagued by frequent equipment failures and criminal activities across its port and rail network.

The SOC indicated that it acknowledged concerns about its acquisition potential in the face of impeded revenue.

Transnet transparently reports its debt position on a half-yearly basis.

We recognise that improvements in procurement process will significantly contribute to the expedited recovery of the company.

With regard to last years Durban High Court matter in which the awarding of a tender to International Container Services Incorporated ICTSI was placed on hold following a successful interdict application by APM Terminals APMT, Transnet said it was looking at bringing this matter to final resolution.

The SOC stressed last year that ICTSIs involvement at Durban Container Terminal Pier 2 had not been set aside by the interdict.

The utility is also not fighting the interdict, as some publications have reported.

Transnet did not appeal the interim interdict granted in favour of APMT. We are focusing our attention on expediting the hearing of Part B of the matter.