ANNOUNCEMENT 26 May 2017

On 26 May 2017, the South African National Treasury issued Circular No. of 2017/2018 designating residential electricity meters and water meters as a sector for public procurement under the Preferential Procurement Regulations, 2017.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

National Treasury designated sectors circular No. 1 of 2017/2018, 26 May 2017: http://ocpo.treasury.gov.za/Resource_Centre/Legislation/Residential%20Electricity%20Meters%20and%20Water%20Meters.pdf

Inception date: 22 Jun 2017 | Removal date: open ended

Public procurement localisation

The Circular designates minimum procurement localisation requirements for the residential electricity and water meters. Residential meters procured by South African government entities must contain a local content threshold of 70% or more for electricity prepaid or postpaid meters, 50% or more on electricity SMART meters and 40% or more on prepaid or postpaid water meters. The manufacturing activities of certain components utilised for subject good must be undertaken in South Africa. The minimum public procurement requirements enter into force on 22 June 2017.

Notably, in August 2014 the South African authorities issued Instruction on Electricity Meters imposing procurement localisation requirements on certain electricity meters, see related measure. This circular replaces and repeals this Instruction.

Under the Preferential Procurement Regulations 2017 the Department of Trade and Industry, in consultation with the National Treasury, is empowered to designate sectors, subsectors, products and industries for public procurement requirements. In such a case public procurement bids have to comply with a set of local production requirements and minimum local production thresholds. Such minimums vary by the sector. If raw materials or input are not available to produce such products, bidders must obtain written authorisation of the DTI to import such materials.

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