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Public procurement localisation
The Instruction designates minimum procurement localisation requirements for conversion processes for local production and content for steel products and components for construction. Local content and production of these steel products and components procured by South African government entities must contain a local content threshold of 100%. The input of raw material in the product of steel products and components for construction are included in the calculation of the local content i.e. these must also be undertaken in South Africa. The minimum public procurement requirements entered into force on 1 February 2017.
Steel products and components for construction cover the following goods: fabricated structural steel, frames, roof cladding, vertical cladding, wire products, fasteners, ducting and structural pipework, gutters, downpipes and ladders made from sheeting as well as primary steel products including flat and long products.
Under the procurement rules of 2011, the South African Department of Trade and Industry (DTI), alongside the National Treasury, has the power to designate specific sectors in which public procurement bids have to comply with a set of minimum local production requirements. Such minimums vary by sector. If input materials or components of the subject good cannot be obtained in South Africa a written exemption must be submitted and approved by the DTI.
Any organ of the state may also choose to establish a local manufacturing minimum for non-designated sectors. Such minimums must follow the DTI and the National Treasury’s directives and consult with them beforehand.
Such minimums may include small variations amongst the percentage of a minimum required depending on the length of the public procurement contract.
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