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Late payments to service providers need to be rooted out – Premier Makwetla

23 May 2005

Nelspruit – Mpumalanga Premier Thabang Makwetla says delay of payments by government to service providers have a crippling effect on small contractors forcing them out of business.

Premier Makwetla was speaking during a Supply Chain Management workshop to address procurement challenges and late payments to service providers held at Emnotweni Arena in Nelspruit.

The workshop was attended by senior and middle management within government to share ideas on how the problem of late payments could be brought to an end.

Premier Makwetla said late payments needed to be rooted out as they add more costs to government, and thus wasting tax payers’money.

“Management must identify problems within our paying systems and work hard in solving them to avoid destroying the potential of small businesses,” Premier Makwetla said.

He said if the 30 days period to pay service providers is not practical, government should look at changing the policy.

“However, if the policy is practical, suppliers should be paid within the 30 days without any delays” Premier Makwetla said.

“We should not introduce a culture of low integrity levels within the public service because as a province, we are trying to identify things we should do to have a competitive advantage over other regions in the country to attract investors, and this could only be achieved through efficiency in the provincial government,” Premier Makwetla said.

He added that this will not be achieved if improper practices are allowed within government. Premier Makwetla said tough stances should be taken against officials failing to pay suppliers within the stipulated 30 days without any justifications.

“We must act against those who are corrupt as corruption is one of the strategic challenges that we must address, and our aspirations of what we want the country to achieve will explode in our faces if we do not root out this phenomenon,” Premier Makwetla said.

The workshop resolved that government officials driven by the spirit of Batho Pele will work hard to ensure that service providers are not owed beyond 30 days.

Government will also expect service providers to render service of high quality before payments are processed, and when service providers are appointed, there will be a service level agreement outlining steps to be taken when contractors render poor quality products.