Questions over new SAA lease tender
South African Airways (SAA), which must negotiate new aircraft leases for a part of its fleet as these expire soon, has called for bids from locally based leasing companies only, saying that preference will be given to bidders that are 51% black-owned.
Most aircraft-leasing companies are large international operations, usually linked to large international banks. There is only one established black-owned aircraft-leasing company in operation, Global Airways, which has a limited fleet. The bid documents suggest that bidders who do not meet the ownership or other transformation criteria can form joint ventures with small or medium black-owned enterprises. This will mean that financiers wishing to bid will need to form joint ventures with partners who are new to the business.
Other criteria that will carry additional weight in the adjudication are companies that are woman- or youth-owned; companies located in rural areas; and companies owned by military veterans.
The bid document is reminiscent of attempts by SAA in 2015 to renegotiate a lease agreement with Airbus to bring in "an African leasing company" as a middleman into the transaction. The Treasury refused to give permission for the change, which it said was expensive and risky.
The aircraft in question are six 737s whose leases expire in the next six to 18 months. SAA says it plans to replace these aircraft with SA-based leasing companies for A320s.
Procurement policies
SAA has previously been in trouble with the Treasury over its procurement policies for adding criteria for awarding tenders that are not in line with government policy. The existing Preferential Procurement Policy Framework Act allows for a maximum 10% weighting for black empowerment and does not permit nonprice criteria other than empowerment to be used in scoring.
But the leaderships of many state-owned enterprises are frustrated by the regulations, which they feel do not go far enough to encourage the transformation of the economy. The result is that they have increasingly made up their own rules, setting preselection criteria that disqualify certain bidders before the tender evaluation takes place.
Spokesman Tlali Tlali said SAA was confident the request for proposals (RFP) was compliant with the procurement regulatory framework. Companies that do not have majority black ownership would not be excluded from bidding, he said. SAA has been developing its supplier database through engagements with black-owned businesses.
Asked whether the RFP was compliant, the Treasury referred Business Day to the Preferential Procurement Framework Act.
Source: Business Day
Source: I-Net Bridge
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