Difference between revisions of "Tenderpreneur (South Africa)"

In some of the most celebrated cases of tenderpreneurship, the tenderpreneur seeks to cultivate a relationship with politicians (and their families) by supporting and financing their careers. The most famous example of this is the relationship between President Jacob Zuma and the Gupta family, comprising the three brothers Ajay, Atul, and Rajesh. Originating in Uttar Pradesh, India, the Gupta brothers immigrated to South Africa in 1993 to establish a foothold for their emerging business, which included Sahara Computers. The Guptas swiftly established political patronage with ANC leaders. In the early 2000s, the Guptas had begun to invest in Jacob Zuma as a future president. The family cultivated their relationship with the future President via employing members of his household, including one of his wives, a daughter, a son and a nephew. Newspaper reports and studies have complied evidence that the Guptas have channelled funding to support Zuma and his political career via employment, favours, bribes and kickbacks (Pauw 2017<ref> Plaut, Martin. 2017. ‘A Crushing Defeat for the Dark Side’. ‘British Journalism Review‘, 28(4), 37-42.

In some of the most celebrated cases of tenderpreneurship, the tenderpreneur seeks to cultivate a relationship with politicians (and their families) by supporting and financing their careers. The most famous example of this is the relationship between President Jacob Zuma and the Gupta family, comprising the three brothers Ajay, Atul, and Rajesh. Originating in Uttar Pradesh, India, the Gupta brothers immigrated to South Africa in 1993 to establish a foothold for their emerging business, which included Sahara Computers. The Guptas swiftly established political patronage with ANC leaders. In the early 2000s, the Guptas had begun to invest in Jacob Zuma as a future president. The family cultivated their relationship with the future President via employing members of his household, including one of his wives, a daughter, a son and a nephew. Newspaper reports and studies have complied evidence that the Guptas have channelled funding to support Zuma and his political career via employment, favours, bribes and kickbacks (Pauw 2017<ref> Plaut, Martin. 2017. ‘A Crushing Defeat for the Dark Side’. ‘British Journalism Review‘, 28(4), 37-42.

In governance terms, tenderpreneurship has two major implications. First, tenderpreneurship is (rightly) associated with poor service delivery and over-charging of the state, with tender often awarded to companies lacking competency. It is not uncommon for tenderpreneur companies to be registered for the sole purpose of accessing a state procurement opportunities through preferential bidding (Corruption Watch 2014<ref>Corruption Watch. 2014. ''Understanding Corruption in Tenders'' http://www.corruptionwatch.org.za/wp-content/uploads/2015/06/Corruption-Watch-Understanding-tender-corruption.pdf</ref>). The preselection process enables corrupt government officials to bias the procurement outcome towards companies deemed to be eligible of high BBBEE status, ignoring matters of competency that is only considered in subsequent phases of the process. In many instances, tenderpreneur companies exist as shell organisations that sub-contract out to other contractors (often established white owned businesses) to do the actual work. This process is known as ‘fronting’ (Bolton 2006<ref> Bolton, Phoebe. 2006. ‘Government procurement as a policy tool in South Africa’. ''Journal of Public Procurement'', 6(3), 193.</ref>). Over-charging for goods and services means that both the tenderpreneur and their client in the state can extract profits from the fulfilment of the tender. Where tenderpreneurship results in poor service delivery, this in turn undermines public accountability and fuels mistrust towards government officials.  

In governance terms, tenderpreneurship has two major implications. First, tenderpreneurship is (rightly) associated with poor service delivery and over-charging of the state, with tender often awarded to companies lacking competency. It is not uncommon for tenderpreneur companies to be registered for the sole purpose of accessing a state procurement opportunities through preferential bidding (Corruption Watch 2014<ref>Corruption Watch. 2014. ''Understanding Corruption in Tenders'' http://www.corruptionwatch.org.za/wp-content/uploads/2015/06/Corruption-Watch-Understanding-tender-corruption.pdf</ref>). The preselection process enables corrupt government officials to bias the procurement outcome towards companies deemed to be eligible of high BBBEE status, ignoring matters of competency that is only considered in subsequent phases of the process. In many instances, tenderpreneur companies exist as shell organisations that sub-contract out to other contractors (often established white owned businesses) to do the actual work. This process is known as ‘fronting’ (Bolton 2006<ref> Bolton, Phoebe. 2006. ‘Government procurement as a policy tool in South Africa’. ''Journal of Public Procurement'', 6(3), 193.</ref>). Over-charging for goods and services means that both the tenderpreneur and their client in the state can extract profits from the fulfilment of the tender. Where tenderpreneurship results in poor service delivery, this in turn undermines public accountability and fuels mistrust towards government officials.