First National Bank Tenders

First National Bank TendersFirst National Bank (FNB) has been reappointed to manage the Gauteng provincial government’s multi-billion rand account for the next five years. ”We are really looking forward to work with FNB for the safekeeping of our province’ resources, and also ensure that all our staff and service providers are paid on time,” Finance MEC Barbara Creecy said during the announcement in Johannesburg on Tuesday. FNB, which is already the provincial government’s banker, beat the other three banks, Standard Bank, Nedbank and ABSA (now Barclays Africa), through an open tender process. FNB’s present contract with Gauteng comes to an end next year. Creecy said the bank would look after the province’s R93 billion budget for the present financial year, which would increase to R103 billion for 2016 and 2017.

”FNB will manage all the banking transactions of the provincial government, including the payment of salaries of 200 000 officials and payments of more than R3 billion a month to service providers.” The bank retained its status after achieving the highest points based on a scoring of the Preferential Procurement Policy Regulations. Creecy said: ”This scores and other matters were debated in the bid adjudication committee, which conducted a public meeting in the presence of the bidders and interested parties in July. The committee session recommended FNB as the preferred service provider.” FNB would in turn invest R200 million to support the province’s township enterprises and work with government agencies in helping start up companies. Danny Zandamela, FNB CEO of public sector banking said his bank was committed to achieving government’s objectives. ”We are greatly honoured and humbled as the selected banker for the next five years, we would also like to thank the province for going the open tender route and thus ensuring transparency,” he said.

FNB one step away from closing deal

FNB has a hurdle to clear before possibly being announced as the preferred service provider for the Gauteng government’s R90 billion five-year centralised banking tender. The bank was strongly recommended for the job by the provincial bid adjudication committee, over competitors Standard Bank, Nedbank and Absa, the only banks with clearance to bid for the government contract. FNB will keep its fingers crossed that the independent probity team drafts a favourable recommendation for Gauteng provincial Treasury head Nomfundo Tshabalala, whose signature will seal the deal. “Somewhere around the 20th, certainly before the end of the month we will call the media in again and announce the winner of the tender,” provincial Treasury head of communications John Sukazi confirmed.

The open tender process came after a study in August last year found that almost 90 percent of Gauteng residents saw corruption as a threat to democracy. The banking tender is the second to be publicly adjudicated as part of the Gauteng government’s efforts to increase transparency in the tender system and follows the award of the Cedar Road upgrading contract which too is part of the pilot exercise to increase transparency. If awarded the contract, FNB will fork out about R3bn a month on supplier payments and on salaries for about 200 000 employees to fulfil its obligations. “We are going to open up the adjudication process so that all those who bid for public tenders will, in due course, be able to watch the process, and be able to satisfy themselves… that there is nothing untoward that is taking place in the process,” said Gauteng’s Finance MEC Barbra Creecy after the adjudication on Friday.

The provincial government had set out corporate and commercial banking requirements with, which the winning bidder had to comply with. Some of these include: good internal fraud controls and strong financial training, as well as skills transfer to the provincial government’s staff. Creecy said she would recommend to her colleagues in the provincial executive council that tenders above R50 million be adjudicated in public for the rest of the financial year. “This is an important step forward in restoring public confidence in government’s procurement process,” she said. “We believe that the vast majority of our public procurement here in Gauteng is done in an appropriate manner in accordance with the requirements of the Public Finance Management Act. “But what we understand is that we need to restore public confidence in that and for that reason we are going to open up the adjudication process.”