SOES CHARGE US EXORBITANT FEES FOR TENDER DOCUMENTS - SMES

MBABANE – State-owned enterprises (SOEs) have been accused of attempting to cushion their finances by charging exorbitant fees for tender documents.

Small and medium enterprises (SMEs), in particular, claim that SOEs are milking them dry by charging exorbitant tender fees, and have since called for government to intervene by regulating the fees. The indigenous businesses accused SOEs of raking in thousands of cash from advertising tenders, which called on the bidders to pay for a tender document. It has been observed that SOEs charge between E500 to E2 500 non-refundable tender fees. The business owners said these fees took from the little they had and this was one of the stumbling blocks faced by SMEs.

This has been viewed as a practice to swindle local businesses. They noted that there was a lot that went through applying for SOE tenders, hence the fees needed to be controlled.
One supplier of cleaning materials and lubricants mentioned that last year, the tender fee was E500 but this year the application of the same tender was E750 with a local parastatal. The businessman said before, they paid way lesser fees yet the parastatals printed the tender documents. They mentioned that SOEs no longer printed tender documents as they were available on the Eswatini Public Procurement Regulatory Agency (ESPPRA) website.

“Before the documents were made available online, the company had to print them. Surprisingly, we now download the documents and print them out ourselves, but still be expected to pay non-refundable tender fees and they are becoming more expensive every year,” said another government supplier. He said the reason they believed SOEs were using tenders to make cash was because some tenders were issued and after the deadline, the company would announce that the tender had been cancelled. “After the cancellation of the tender, we are never refunded, hence we strongly believe that SOEs are swindling us through tenders,” said the entrepreneur. Others accused parastatals of deliberately dividing one tender into three categories just to collect more application fees. They said the tender fees needed to be scrapped, because these SOEs were no longer printing these documents or there should be, standard price not exceeding E400.

Regulated

“Tender fees for parastatals needed to be regulated just like government tenders. Government tender applications are charged at E300,” the businessman said. The businesses alleged that SOEs had become slick about the tendering process. They recounted how they had found a way of creating different tenders for one single product, so that they could make money from the application fees. To explain their point, they made an example of electronics and hardware. It was alleged that there were cases where a company would need an information communication technology system, but, instead of issuing one tender, they would divide the tender into at least three different tenders. They would issue a tender for laptops and collect money on it. Then issue a tender for printers and another tender for cartridges.

The businesses accused ESPPRA of not being vigilant on such. They highlighted that just a few weeks ago, ESPPRA launched a Standard Pricing Catalogue for commonly used items under public procurement. The catalogue was said to reduce overpricing of commonly used items within the sector. The suppliers said the very same prices in the catalogue dated back to 2022, and some parastatals were using those prices on top of the tender fees. Questions were sent to ESPPRA and its mother ministry, the Ministry of Finance, but they had not responded at the time the report was compiled. The Ministry this Finance’s Communications Officer, Setsabile Dlamini, referred questions to ESPPRA. “I think ESPPRA is the right entity to reply on this because it deals directly with SOEs,” she said.

A questionnaire was sent to ESPPRA office, but it was also not responded to on the basis that the Chief Executive Officer Vusi Matsebula, was out of the country. This is not the first time the issue of tender fees has been brought up. Last year, during the Ministry of Finance budget debate at Senate, former Senator Sylvia Mthethwa cornered Minister Neal Rijkenberg about the regulation of tender fees. She said tender fees were understandable in the past because SOEs gave out tender booklets which were costly to print and package. These days, then senator said, the tenders were issued by ESPPRA, with one original copy and duplicates.  “What are we doing to the business community; are we encouraging business or we are destroying them?” she asked. The former senator said she was of the view that the tendering process was not above board and pleaded with the minister to intervene.

Suffered

The erstwhile senator said already, businesses had suffered immensely because of COVID-19. She said the manner in which parastatals were carrying on, they were worsening the situation, because they had not gone back to the level they were operating at before. Mthethwa said she was of the view that someone, somewhere, was not doing his or her job, because emaSwati were not given a suitable environment to be successful in business. In response, Rijkenberg stated that they were working on various systems that would take away the tender pain in the local business community. The minister said they had been working on an e-procurement system with the regulator, which would also sort out the mismanagement of funds that were often exposed by the auditor general in his report.

He said they were benchmarking this system against the Rwandan system.  “Once the system is up and running, businesses will be conducting tendering through it and will take off the tender pain,” he said.  Almost a year later, the ministry, with ESPPRA, is still working on developing the online tendering system. The agency was established by the Public Procurement Act of 2011 and is entrusted with ensuring transparency and accountability in public procurement while maintaining appropriate confidentiality of information, achieving economic efficiency and maximum competition to ensure value for money in the use of public funds, promoting more diverse private sector participation through fair and non-discriminatory treatment of tenders. According to a 2020 report on the contribution of public procurement to the Gross Domestic Product (GDP), public procurement contributed 22.6 of the GDP, which was equivale

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