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Cost cutting effective: Treasury

The power of the Treasury to enforce cost-cutting measures has been in question as political pressure on Finance Minister Pravin Gordhan suggested he lacked support from cabinet colleagues and the president. But savings have been achieved. The most significant has come from reducing the reliance on consultants by 12.6% since 2012. Limits on travel, catering and fancy functions have also achieved savings of about 5%. The state spent R15.7?billion on contractors in 2015/16, mainly relating to maintenance of infrastructure assets, including roads, hospitals and schools, the Treasury said. Gordhan said the chief procurement office was renegotiating contracts with airlines, hotel groups, software suppliers, pharmaceutical companies, property owners and construction firms, with the aim of saving R25bn a year by 2018/19.

The eTender portal, which allows registered suppliers of government goods and services to submit bids electronically, had published more than R80bn worth of tenders, saving R650 million a year in printing and advertising costs, Gordhan said. The Treasury said transversal contracts, in which government departments and entities shared contracts with suppliers that were negotiated centrally, now covered 23?000 items worth an estimated R37bn. In telecommunications services alone, savings of R400m a year were expected.

Source: www.iol.co.za

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Cost cutting effective: Treasury

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