Please NOTE: This article was published 11 August, 2015

According to the draft Preferential Procurement Regulations 2015 document which was leaked to The Mercury newspaper, Indian and coloured businesses applying for government tenders to the value of less than R10 million would not get any preferential procurement points. They would only be able to compete on price.

The draft document shows that for tenders of less than R10 million, 50 points were price-based and 50 based on preferential scores for those who had no franchise in national elections before the 1983 and 1993 constitutions (12 points).

Additional points would be awarded for businesses which had:

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  • 51 percent or more ownership by women (12 points)
  • 51 percent or more ownership by those with disability (12 points)
  • a small or medium enterprise (6 points) and
  • local eco-economic development factors (8 points)

These new regulations could lead to public taxes being used to pay inflated prices for tenders as race is seen to take priority over price.

The draft regulations have not yet been signed by by Finance Minister Nhlanhla Nene and will be subject to public consultation.