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FNB re-appointed as bank of Gauteng government

Johannesburg - Gauteng re-appointed First National Bank (FNB) as its banker for the next five years, a contract worth an estimated R20m a year, finance MEC Barbara Creecy announced on Tuesday.

FNB would manage all the provincial government's banking transactions, including the payment of 200 000 officials and supplier payments of more than R3bn per a month, she told reporters at the Gauteng legislature in Johannesburg.

Gauteng's budget for the 2015/2016 financial year was R95.3bn, and would increase to R103bn in the 2017/2018 financial year. The R20m estimate arises from fees FNB are expected to charge on the volume of transactions it processes for the provincial government.  

"In addition, the company will provide corporate and commercial banking services, which include free training and development of Gauteng provincial government officials in all spheres of financial services as required by the province," she said.

"I think it's important to say as our banking partner in this province, FNB has also committed to certain social responsibility programmes. Key to this is investing R200m through the Vumela Fund to support the development of township enterprises."

The bank would also work with the Gauteng Enterprise Propeller on incubating start-up companies. 

It would also assist small, medium and micro enterprises that want to bank with FNB with online applications for BEE certification at discounted rates, obtaining tax clearance certificates, and automated registration for value added tax.

READ: FNB support for NPOs after Zuma exposé

"You would know our premier David Makhura is very passionate that we need to find ways to give financial support to township enterprises," Creecy said.

FNB retained its status as the provincial banker through receiving the highest score as assigned by the 2011 preferential procurement policy regulations.

The tender, which was open to South Africa's four major banks, was also the last of Gauteng's open tender pilot process, with the first being the contract to upgrade Cedar Road.

"The Gauteng provincial treasury will recommend to the provincial council that the next phase involves implementing the system in more than 20 key projects valued at over R50m each by the end of the current financial year," Creecy said.

"We believe this will go a long way to restoring public confidence in the government procurement process."

Asked what the provincial government have learnt from the pilot project, where the public sit in and observe the tender allocation process, Creecy said it is very important to have continually and intensively train supply management officials.

"I think that there is a continual process by Treasury of updating the process. What we've realised through this process, [is that] it is very important that there is a continual process of training," she said.

"I think in both of the pilots that the probity audit has been extremely useful to the offices that has to make that financial decision... and provides a useful tool to the heads of departments."

One of the major challenges posed since the pilot project was launched was running the adjudication process in a public way.

"They [the public] must be observers, not participants... It sounds silly but we had to delay this particular process twice because we couldn't find a large enough venue. Once we start to make this a common way in which we do government procurement, we need a dedicated facility."

Other provinces have shown interest in Gauteng's open tender process, with it requested to do a presentation at the next budget committee lekgotla, where all the respective finance MECs meet with the finance minister. 

Creecy said both the mayor of Ekurhuleni metro municipality and the mayor of the West Rand district had also expressed their interest in the open tender process.



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