A GOVERNMENT specialist
TMC (who wished to
remain anonymous)
has warned of the dangers
of taking on government
accounts, saying payment
delays could sink both small
and large businesses that did
not have capital resources to
deal with the delays.
He told TNW he was currently
out of pocket for R8 million and
that he hoped to receive the
outstanding funds in April or
May when the new government
budgets came into effect. “We
have learnt over the years
that it is not wise to have a
business mix that includes
more than 20% government
business,” he added.
Following a short stint of
timeous payments to suppliers
after Cyril Ramaphosa’s
appointment as president,
TMCs report that government
has slipped back into the bad
habit of late payments.
Of respondents to a recent
eTNW poll, 94% confirmed that
government was not paying its
travel accounts on time.
During the State of the
Nation Address in 2018
the president spoke out
about the repercussions of
government delaying payment
to its suppliers: “It is clear
that the failure of some
government departments to
pay suppliers within 30 days
has a devastating impact
on small and medium-sized
businesses.”
At the time, TMCs reported
an immediate improvement
in payment windows but a
year later, md of Club Travel,
Wally Gaynor, said there had
been a definite slowdown. He
added that Club Travel was
currently engaging with various
departments about this issue.
Sailesh Parbhu, md of XL
Nexus Travel said certain
government departments had
slowed down on payments
saying they had run out of
budget.
Lodge cards?
TMCs are asking what is
happening with the use of
lodge cards as payment for
government travel. Late last
year at the annual GBTA
Conference, Phale Naake,
then deputy director of
strategic procurement at
National Treasury, said the
cards would soon become
the mandatory method of
payment for government travel
accounts.
TMCs canvassed at the time
were in favour of this, saying
they would receive payment
immediately rather than
having to wait for government
accounts to be processed.
However, six months after the
statement, Treasury has made
no official announcement
about any formal change
in policy, say TMCs. TNW
contacted Treasury for an
update, but had not received
a response at time of going
to print.
TNW’s government TMC
source said that a few years
ago certain government
departments had tried to
institute a lodge card payment
system. But when the cards’
credit ran out it was not
replenished and the TMC had
to revert to the old system of
account payments. The source
was sceptical about how
effectively this process would
work when rolled out across
all government departments.
Wally was more optimistic,
saying a number of Club
government accounts had
already moved across to lodge
cards. He said this option
was working very well but
that implementation across
departments was an ongoing
process.
