MEC Barbara Creecy announces appointment of FNB as Gauteng's banker

FNB appointed as Gauteng’s banker

Today the Gauteng Provincial Government (GPG) announced First National Bank (FNB); a division of First Rand Limited, as the service provider to manage the multibillion rand centralised banking services account of the province.

“I would like to congratulate FNB on this important appointment and we look forward to working with them to ensure both the safekeeping of the province’s resources and the timeous payment of our staff and service providers,” said Gauteng Finance MEC, Ms Barbara Creecy.

The province’s budget will increase from R95.3 billion in the 2015/16 financial year to R103 billion in 2017/18. Therefore FNB will manage all the banking transactions of the provincial government including the payment of salaries of 200 000 officials and supplier payments of more than R3-billion per month.

In addition, the company will provide corporate and commercial banking services which include, free training and development of GPG officials in all spheres of financial services as required by the province.

Speaking following the announcement in Johannesburg today, CEO FNB Public Sector Banking, Mr Danny Zandamela welcomed the news; calling the appointment a “great honour and privilege” for the bank.

“It is a humbling experience which also brings with it great expectation. It is FNB’s intent and commitment to fulfil all obligations entered to successfully. We look forward to the next coming years in facilitating and enabling Gauteng Provincial Government to achieve its objectives. FNB would also like to thank GPG for being forward thinking by pioneering the first Open Tender process in the country,” he said.

This is the fifth time that the province went out to the market to procure a banking service. FNB currently holds the province’s centralised banking services contract which ends in March next year.

The company was able to retain its status as the provincial banker for the next five years after achieving the highest points based on a scoring system of the Preferential Procurement Policy Regulations of 2011. According to this evaluation criterion, points are allocated in terms of price, functionality, and broad-based black economic empowerment credentials to determine the appointment of a suitably qualified service provider by government in a fair, equitable, transparent, competitive and cost-effective way.

This score and other matters were debated in the Bid Adjudication Committee (BAC), which conducted a public meeting in the presence of the bidders and interested parties in July. This BAC session recommended FNB as the preferred service provider.

The report of the BAC and that of an independent probity team were forwarded to the Head of Department of the Gauteng Provincial Treasury (GPT) Ms Nomfundo Tshabalala, who as the Accounting Officer took the decision to appoint FNB in line with the recommendations of the BAC.

As the banking partner to the provincial government, FNB has committed to implement the following key initiatives:

  • Invest R200 million through the Vumela Fund to support the development of township enterprises;
  • Work in partnership with Gauteng Enterprise Propeller on incubation of start-up companies;
  • Assist SMMEs that want to bank with them with online application for EmpowerDex BEE certification at discounted rates, online interface in order to obtain Tax Clearance Certificates (TCCs), and automated registration for VAT.

“We will ensure that this partnership assists with our programme of township revitalisation by availing financial and non-financial assistance to small business owners. We also want to work with FNB to increase the financial literacy of government employees,” Creecy added.

The awarding of the banking contract also concludes the Open Tender pilot process of the GPG. The first project was the upgrading of the Cedar Road. That contract has been awarded and construction has begun.

“The GPT will recommend to the Provincial Executive Council that the next phase involves implementing the system in more than 20 key projects valued at over R50 million each by the end of the current financial year. We believe this will go a long way towards restoring public confidence in the government procurement system,” Creecy added.

The Open Tender pilot process was launched in November last year. It is based on seven key principles aimed at improving transparency in line with Public Finance Management Act (PFMA).

These are (1) Back to key SCM fundamentals which emphasises that there is a need to return to the basics of supply chain management and do things the correct way; (2) Probity Audit will be utilised to provide assurance that all procurement processes comply with SCM legislation, regulations, policies and procedures before any tender is adjudicated; (3) Public Adjudication of Tenders will be conducted in full view of the public; (4) Publication of Procurement Plans on the GPT website/e-Tender portal to provide potential bidders with an opportunity to access markets; (5) Publication of  Tender Information at each stage of the process on the GPT website/e-Tender portal; (6) Capacity Building directed at committee members and all stakeholders involved in the SCM process; (7) Procurement Hub, a state of the art facility where all provincial procurement processes will be conducted to eliminate possible loss of documents, enable proper record keeping for future reference/review of bids, as well as build the integrity of the tender administration process in general.

For more information please contact:
John Sukazi
Cell: 083 772 4885
E-mail: john.sukazi@gauteng.gov.za

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