The tender trap: Procurement goes horribly wrong in PE

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The tender trap: Procurement goes horribly wrong in PE

IDC-funded Chinese car plant is five months behind schedule because of protests by local small businesses

BusinessLIVE reporter

There is an ominous silence around Port Elizabeth near where the construction of the R11-billion Beijing Automotive Industry Holding Company (BAIC) vehicle plant is taking place.
In December 2017, it was acknowledged that the plant – much of which is funded by the Industrial Development Corporation (IDC) – was at least five months behind schedule. This has been mainly due to protests and stonewalling by some exceedingly small business interests in the city, who say they are not getting their fair share of tenders.Recent calls to those who know something about such delays have yielded little information. Now, the building of the factory in the Coega Industrial Development Zone is said to be going ahead at pace, but no proof of this has been proffered.
Minutes from a stakeholder meeting in Port Elizabeth in late November 2017 showed how small, medium and micro enterprises (SMMEs) were unhappy about the way tenders were issued for up to 35% of work. This caused multimillion-rand stoppages.It was also apparent at that time that critical funding for the BAIC SA project had not yet been released. It is expected to build 50,000 vehicles a year by 2022, but the start-up date scheduled for 2018 may yet prove to be a bridge too far.
The stakeholder minutes showed that a representative of the IDC was told “he must watch his moves and do the right thing”, as SMMEs threatened to shut down the site late last year.If any light needs to be shone on this project, perhaps the best place to start is by reading the book How to Steal a City by Crispian Olver.

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