State-owned Transnet on August 19 held its yearly supplier day workshop, during which a “comprehensive but not exhaustive list” of procurement opportunities for suppliers across the entity’s operating divisions was outlined, with this including an about R2-billion of total estimated spend by Transnet Engineering for the 2025/26 financial year. 

Suppliers were also informed of some of the common errors they commit during the procurement processes, which presents challenges for the entity. 

Moreover, there were presentations on the current challenges and opportunities, as well as progress in specific areas and projects. 

This included in supply chain digital enablement, with further digitalisation of the procurement processes being pursued following the improvements make to the e-tender system, and the current procurement environment not being aligned with Transnet’s strategic visions to transform into a digital enterprise. 

There is currently no single, integrated and automated technology solution to perform the end-to-end procurement process, with these only partially automated. 

As such, an end-to-end digital recruitment solution is being sought, with such a solution expected to engender transparency, increase efficiency, cost-savings, improved workflows, compliance, accessibility, data-driven decisions and scalability. 

Information sessions and training is currently being undertaken as part of this. 

It is anticipated that go-live and supplier onboarding would start in September, while post go-live support would be ongoing. 

Speaking during the workshop, Transnet group chief procurement officer Vuledzani Nemukula emphasised the importance of both the entity and its suppliers complying with proper legislative requirements and of ensuring transparency. 

He said the entity has zero tolerance for fraud and corruption and would use all measures available to it, including restriction and referral of the matter to investigation agencies for criminal prosecution. 

Nemukula pointed out that bidders have an obligation to ensure their bids are prepared independently, and discouraged the use of third parties in the preparations of these. 

He warned that any supplier found to have abused the supply chain management system by any organ of State, would be restricted from doing business with all organs of state for a specified period, following a process. 

Nemukula assured that Transnet ensures that there is no bias or perception of bias in its procurement process. 

TRANSFORMATION 

Transnet Broad-Based Black Economic Empowerment (BBBEE) and localisation acting GM Makhosazana Masilela detailed the entity’s enterprise supplier development and localisation (ESDL) procedures and policies, indicating that these are aligned with the country’s development imperatives, and informed by the BBBEE code of good practice. 

Masilela pointed out that Transnet leverages on yearly procurement spend of about R46-billion to drive transformation. 

She explained that its enterprise supplier development (ESD) programme aims to increase the competitiveness, capacity and capability of black-owned suppliers through financial and non-financial support. 

Transnet targets ESD initiatives that support localisation and industrialisation. 

Its EDSL strategy is aimed at supporting young entrepreneurs through the various levels of development. 

Masilela informed that the entity is advancing the localisation of rolling stock designated items and port handling equipment through a directed procurement strategy. 

She indicated that ESD initiatives are identified yearly, funded through net profit after tax. 

Masilela emphasised that Transnet must ensure that, where opportunities for empowerment are identified and feasible to apply, several transformation opportunities should be considered and incorporated in a bidder’s contact. 

These opportunities include in local economic development and subcontracting, subcontracting conditions, beneficiary criteria for subcontracting, and transformation as a condition of contract. 

The National Empowerment Fund (NEF)/Transnet SMME Fund was also detailed, which entails the establishment of a co-funded partnerships facility of R200-million over a five-year period following the signing of a memorandum of understanding between the two entities. 

The fund is targeting small, medium-sized and microenterprises (SMMEs) participating in Transnet companies and subsidiaries’ value chain. The SMME’s must meet certain NEF criteria. 

This fund aims to tackle several challenges facing black business, which were indicated to include limited own capital, access to affordable capital, limited management skills, lack of accurate and reliable financial information, compliance documentation not in place, poor quality of business plans, lower bargaining power and strong competition from established business with entrenched market dominance, and lack of access to local and international market. 

Also outlined was the Black Industrialist programme, which would develop ten black industrialists.
A programme is being undertaken for this, which entails identity emerging localisation opportunities within four Transnet operating divisions. 

The outcome of the programme will be to develop local manufacturing capacity and capability for these industrialists to meet Transnet’s requirements and enter into a  long-term procurement contract with the entity manufacturing the identified commodities that the black industrialist was updated for. 

As part of the rollout, supplier identification and selection is under way this year.