Overpricing is where the real leakage is, Treasury’s Kenneth Brown says
IT IS SA’s equivalent to the proverbial $640 Pentagon toilet seat — a paper binding machine that the government buys from its suppliers for the rand equivalent of almost $2,000, about 13 times what it costs in a shop.Chief procurement officer Kenneth Brown cited the binding machine as an example of the massive waste that means as much as 40% of the government’s R600bn budget for goods and services is being consumed by inflated prices from suppliers, and by fraud."It means without adding a cent, the government can increase its output by 30%-40%," he says. "We could be building more roads, more schools without even adding more money to the current budget."Since the office was set up in 2013, Brown and his team of 93 have led a Treasury drive to contain spending and renegotiate business deals that has taken on new urgency as SA faces a possible credit-rating downgrade to junk.Finance Minister Pravin Gordhan has pledged to stick to a spending cap, under pressure from the rating companie...
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