Proposals to remove the term “Historically Disadvantaged Individuals (HDIs)” from the eThekwini Municipality draft Supply Chain Management (SCM) Policy 2025/26 financial year came under discussion at Tuesday’s council meeting.

During a municipal Finance Committee meeting, councillors raised several points, including concerns regarding the definition and splitting of contracts (unbundling of contracts).

The report supporting the removal of HDIs referenced Section 217 (1) of the Constitution.

This section mandates that organs of state, when contracting for goods or services, must do so through a system that is fair, equitable, transparent, competitive, and cost-effective.

Councillors expressed the view that with the HDIs clause, the municipality will lose cost-effectiveness as procurement will be based on skin colour rather than skills. It was noted that the definition of HDIs does not align with other policy documents, including the Preferential Procurement Policy Framework Act (PPPFA).

At the meeting, clarity was provided that Section 217 of the Constitution amplifies the necessity that while the government prepares for procurement processes that aspire to those principles, it also does not prevent implementing procurement policies that provide for the protection and advancement of persons or categories of persons from historically disadvantaged groupings. 

A report before the council stated that the Draft Policy is being amended to include the definition of the unbundling of contracts to the municipality’s objectives to advance economic empowerment, creation of job opportunities, and support local businesses, particularly those owned by black individuals, women, youth, and persons with disabilities.

Rory Macpherson, Democratic Alliance councillor, said the Broad-Based Black Economic Empowerment (B-BBEE) Act has failed and should be replaced.

He was also concerned about the use of the word “black people”. According to the B-BBEE Act, black people is a generic term which refers to Africans, Coloureds, and Indians who are citizens of South Africa by birth or descent.

“The policy deliberately removes the explicit recognition of Indian, Coloured, and White South Africans in SCM processes and replaces it with vague language such as/or where appropriate. This is not a mistake; it is a calculated attempt to disguise exclusionary practices while tightening political control over who can do business with the city,” Macpherson stated. 

He added that despite decades of race quotas, unemployment is at record highs, poverty continues to grow, and small to medium-sized businesses are being pushed out unless they are politically connected.

“This policy does nothing for ordinary entrepreneurs; it only entrenches inequality and patronage,” he said. 

Nkosenhle Madlala, ANC councillor, said Macpherson’s remarks could mislead the public, adding that the policy included all women, even white women, disabled people, military veterans, including whites who served in the South African National Defence Force (SANDF). 

Petros Nxumalo, ANC Ward 4 councillor, said the policy was in line with the Constitution and councillors should not politicise it.

He explained that there were extensive consultations with stakeholders whose functions relate to the SCM processes. 

“The policy has specific goals and is guided by the Constitution. The amendments will help the procurement process,” he said. 

Patrick Pillay, leader of the Democratic Liberal Congress (DLC), hoped that this revised policy would bring about greater controls on the procurement of goods.

Pillay said that to add substance to these amendments, there will need to be a concerted effort by all stakeholders to ensure that absolute monitoring and evaluation becomes a daily mantra.

He urged municipal management to act with great speed to investigate and discipline any official found to be flouting the SCM Policies. 

“This can only be achieved if and when all line departments strictly follow the respective SCM processes. The Auditor-General made it very clear in the annual report with specific references to the escalation of unauthorised, irregular, and wasteful expenditure as well as the splitting of contracts. The raising of these matters is very significant because it’s the flouting of these SCM processes that is preventing our city from attaining a clean audit,” Pillay said.

Henricus van der Ryst, Freedom Front Plus councillor, felt that some of the amendments would give certain municipal officials free rein to issue tenders by not following the normal procedures.

zainul.dawood@inl.co.za

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