The South African government is working to finalise “framework contracts” that can be drawn on by municipalities on a voluntary basis to streamline the procurement of key infrastructure goods and services.

Speaking on behalf of Cooperative Governance and Traditional Affairs Minister Pravin Gordhan at the centenary convention of the Association of Municipal Electricity Utilities (AMEU) in Sandton, Municipal Infrastructure Support Agent CEO Dr Sean Phillips said the contracts would allow municipalities to place orders without the need for separate procurement processes.

He anticipated that the first three-year framework contracts would be in place during the course of 2016 and indicated that transformers, pumps and construction services would initially be targeted.

However, in the electricity arena, municipalities would soon be in a position to piggyback on Eskom framework contracts for certain distribution equipment starting with pole-top transformers.

For the non-Eskom contracts, suppliers would bid as part of a tender overseen by national government, after which municipalities would be in a position to buy goods and services against those three-year contracts.

The rationale for the intervention was to achieve economies of scale, accelerate equipment purchases, reduce the threat of procurement-related corruption at the local government level and to ensure better prices, especially for under-resourced municipalities.

But Phillips stressed that the contracts would not be imposed on local government. “Participation by municipalities in these framework contracts will be voluntary and municipalities will be free to procure elsewhere if they can procure better quality or at better prices.”

By keeping the programme voluntary, central government also hopes to sustain competitive pressures for the duration of the framework contracts, as it would enable municipalities to pursue even better deals with the supplier community.

AMEU president Sicelo Xulu, who is also MD of Johannesburg’s electricity utility City Power, said municipalities were supportive of the concept, as it would give them greater leverage with suppliers.