Budget sets out new procurement checks

Finance Minister Pravin Gordhan on Wednesday announced new measures to fight waste and corruption in state procurement, notably a review of all property leases.

"The minister of public works and I have agreed to undertake a joint review of the validity and cost effectiveness of all government property leases," he said, delivering his 2012/13 Budget in the National Assembly.

The announcement follows last year's police headquarters lease scandal and national government's intervention in Limpopo, Gauteng and Free State.

Gordhan said one of the lessons learnt from placing several provincial departments under administration was the need to clean up tender systems.

"We need stricter oversight of supply chain management processes."

Gordhan said National Treasury would draft a price referencing system to make it easier to detect tenders that exceeded acceptable levels.

It would also appoint a chief procurement officer to monitor tender processes across all levels of government.

Following President Jacob Zuma's pledge in his state-of-the-nation address that there will be strict vetting of all procurement officers, Gordhan said there would be a review of the skills requirement for people in those positions.

Finally, the tax clearance system will be strengthened to bar fraudsters from doing business with the State.

The former head of the Special Investigations Unit, Willie Hofmeyr, estimated last year that corruption cost the state up to R20 billion a year.