Cape Town urges President Ramaphosa to reconsider Public Procurement Bill

8 August 2024  

In a letter to the President, Mayor Hill-Lewis said the City will have no option but to launch a constitutional challenge if the Bill is gazetted in its current form.

‘This Bill allows direct interference in municipal procurements by Provincial Treasuries and a new national Public Procurement Office, who will be empowered to dictate instructions to municipalities without proper cooperative governance arrangements or consultation. This is unconstitutional, and undermines local government autonomy and direct accountability to serving residents.

‘At a local level, we often have to procure fast to respond to urgent water, sanitation, electrical, waste, and environmental issues. But this Bill impedes the ability to respond swiftly to local needs by introducing more red tape to complicate procurements. This inefficiency will have a direct impact on service delivery to residents,’ said Mayor Hill-Lewis.

The City has wide-ranging concerns about new red tape introduced in the Bill, including:

-        Municipalities won’t be able to maintain their own database of accredited suppliers, and payments to suppliers will need to be integrated with a national database

-        Centralising all national procurement via a Public Procurement Office (PPO) further runs the risk of nationwide disruptions to municipal procurements if the central system goes offline

-        Municipalities will no longer have the power to lawfully deviate from procurement regulations for urgent service delivery without centralised approval via the PPO

-        Spurious tender appeals may hold up service delivery as the Bill limits the ability to conclude contracts while tender awards are reviewed

Mayor Hill-Lewis raises further concern that the Bill will undermine infrastructure investment, and the President’s commitment to cut red tape across the board to ‘turn South Africa into a construction site’.

‘Infrastructure can often be delivered much faster via public private partnerships, but the Bill mirrors existing municipal legislation which makes PPP’s too complex and time-consuming for municipalities to even attempt. Cutting red tape around infrastructure upgrades is vital to us here in Cape Town, as we aim to deliver on our SA-record R120bn infrastructure pipeline over ten years, with 75% of infrastructure spending directly benefitting lower income households. The Bill further contains  no provision for municipalities to leverage procurement for local socio-economic development, as required by Section 151 and 152 of the Constitution,’ said the Mayor.

The City is further concerned that around 36 elements of the Bill require new regulations, exposing local government to hidden cost implications and red tape burdens.

‘Introducing the National Finance Minister as a regulatory authority for local government is inconsistent with the Constitution, Municipal Systems Act and the Municipal Finance Management Act. A Public Procurement Office should be advisory at most. Oversight over public procurement is already carried out by the Auditor General and Public Protector,’ said Mayor Hill-Lewis.

Issued by Media Office, City of Cape Town, 8 August 2024