Court overturns BEE rule allowing prequalification
BUSINESS LIVE / 02 NOVEMBER 2020 - 19.28 / CAROL PATON
Public entities can no longer demand that companies be 51% black-owned to get tenders
The Supreme Court of Appeal on Monday struck down a provision in the regulations of the preferential procurement legislation that has allowed government entities to set prequalifying criteria for the consideration of tenders.
The regulations of the Preferential Procurement Framework Act were widely used by state-owned companies Transnet and Eskom during the state capture period to skew the award of tenders by imposing prequalification rules, such as the requirement for bidders to be 51% black-owned. Eskom, for instance, set a requirement that all coal vendors be 51% black-owned, a move that distorted coal prices and led Anglo American to sell its undeveloped Key Largo mine in 2018.
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