Independent
Online, 08 November 2002, Condom companies deflated over tender loss
Hundreds of South
Africans in the condom manufacturing business have lost their jobs after
contracts for the multi-million rand industry were awarded to overseas
companies.
The agreements, which form part of the R90-million industry, were awarded to six
companies, including Chinese and Taiwanese businesses.
Nearly 500-million condoms are produced in
The condoms are distributed throughout the country by the national department of
health as part of its campaign against HIV/Aids.
Since the awarding of
the contracts, two condom manufacturing companies based in Pietermaritzburg and
Surogit Palit, general manager of STX Prophylactics
in Pietermaritzburg, said they lost their R17-million contract in 2001.
He said for the past five years they had been
manufacturing and producing 70-million condoms annually for the department of
health.
"We were told that our contract was being
terminated because of the prices that we were charging. But, we have discovered
that our prices are some of the most competitive despite our price benefit being
taken away," he said.
Palit said that as a direct result of losing the
contract to international companies, they had been forced to retrench more than
100 workers.
He said he could not
understand why, when
"It does not make any sense, especially when we
have to lay off South African workers because our government wants to hire
international labour," said Palit.
Carol Woods of Latex Surgical Products, which is
based in
She said no reason had been given and declined to
comment on how many workers had been retrenched as a result of the loss of the
contract.
Spokesperson for the health department, Jo-Anne
Collinge, said the tender system had changed since the condom tender was last
awarded.
She said in the past the tender process was governed
by the State Tender Board Act that allowed specific preference for local
companies.
Collinge said the Preferential Procurement Policy
Framework Act now applied and allowed local suppliers to compete on an equal
footing with foreign bidders.
"Tenders involve a range of criteria with price
only forming a part of this," she said while commenting on the fact that
STX Prophylactics had lost its contract because of their high prices.
Collinge said the tender was awarded to six bidder
companies with the share of the tender ranging from five percent to 25 percent.
She said any company aggrieved by the tender loss
could ask for reasons behind the loss in terms of the Administrative Justice Act
and the Promotions of Access to Information Act.
Sibani Mngadi, spokesperson for National Minister of
Health, Manto Tshabalala-Msimang, said the contract on the procurement of
condoms was between the Office of the Tender Board and the companies bidding for
the contracts.
He said the responsibility of selecting the companies
to carry out the contracts did not lie with the health department.