The Automotive Aftermarket Association Forum (AAAF) has warned that more than 162 000 jobs were at risk among the predominantly black-owned Small, Medium and Micro Enterprises (SMMEs) in the automotive aftermarket industry due to the closure of dozens of workshops daily under the controversial multibillion rand RT46 Government Tender.
AAAF this week said that most several workshops in Gauteng, Eastern Cape, Free State, and KwaZulu-Natal were facing closure or going out of business after being allegedly excluded by WesBank from sharing the contracts for the repair and maintenance of the government fleet.
The RT46 tender is currently administered by WesBank, NedFleet, and Fleet Africa. It provides vehicle fleet management services to the State for a five-year period, effective 1 April 2021.
This tender pertains to the management of repairs and maintenance of the government fleet, including police cars and ambulances are on the road and delivering services which are much needed.
The workshops are operating among others in auto glass, panel-beating, recovery, towing, automotive workshops, car wash and spares retailing.
AAF chairperson, Sello Mosai, said that the gravity of the situation was such that workshop owners affiliated with them were considering extreme measures rather than face the inability to pay rent or cover essential expenses such as school fees and food for their families.
“Historically disadvantaged individual merchants and SMMEs in these contracts operate within South Africa’s legal frameworks with a BBBEE-level 1 rating,” Mosai said.
“Despite the government’s good intentions to promote transformation and inclusion of historically disadvantaged individuals, particularly black-owned companies, the ownership patterns in the automotive industry and value chain continue to reflect a concerning picture.
“It is abundantly clear that the sector remains predominantly owned along racial lines and concentrated in the hands of the historically advantaged.”
The SA Police Service has written a letter to its fleet manager WesBank informing it to stop giving its cars to the small businesses for repairs, alleging that they took too long to fix them, crippling the efficient response to crime.
This has threatened to put an estimated 54 000 jobs on the line and about R450 million monthly revenue loss for small independent businesses in the automotive industry.
Mosai said they had engaged WesBank about the alleged discrimination and barriers faced by black-owned businesses contracted through the RT46 Tender, adding that they had also raised the matter with the National Treasury and the Department of Transport but little had been achieved or done.
The Transversal Term Contracts cluster refers to centrally facilitated contracts arranged by the National Treasury for goods or services needed by one or more institutions.
Among the running RT contracts are those administered by Wesbank (RT46), Nedbank, Fleet Africa, and several others.
In response to Business Report, WesBank said it followed the rules and guidelines set by the government in the execution of the RT46 Contract.
Wesbank said it has implemented several projects with a number of automotive associations and forums to enable skills development for the black-owned SME merchants in the automotive sector, and to ensure they were better positioned to operate sustainably.
“Since the inception of the contract in 2021, the majority of the work allocation in the execution of this contract has been given to black-owned SMEs merchants,” it said.
“We have about 6 500 black-owned SME merchants on our books that we allocate work to in a fair and equitable manner as prescribed by the contract.”
WesBank added that it remained committed to the underlying principles of the contract, which was to provide growth opportunities for black-owned SMEs, while also meeting the need to provide the required services to the network of government Fleet units, which in turn provided critical services to all South Africans.
BUSINESS REPORT