Now govt readies to chop transaction fees

NATIONAL Treasury will publish a
tender at the end of May, with
the aim of selecting a panel
of 10 TMCs that will be approved to
deal with government travel.
In the bids they submit, TMCs will
need to specify a set management
fee for the work they will be
conducting for government instead
of a “per transaction service fee”, a
government official said, who spoke
to TNW on condition of anonymity.
Once Treasury has approved the
panel of 10 TMCs, the various
government departments will be
able to hold “closed tenders” to
select their preferred TMC partner
from the panel. The tender process
will take some time and the panel
of TMCs is only expected to be
appointed by October this year, the
official said.
Meanwhile, TMCs who currently
provide travel services for
government, continue to liaise with
Treasury in the hope of finding a
resolution to the current service
fee issue. The new ‘standard
remuneration model’ has cut all
rebates, overrides and volumebased
incentives from suppliers
to TMCs, without making provision
for increased service fees. For the
past few weeks, all rates offered
to government have been nett and
non-commissionable.
TMCs have highlighted the issue
with Treasury, submitting revised
service fee proposals for services
rendered until the end of October
that will ensure the financial viability
of continued operations. However,
agents say although Treasury
promised to consider proposals and
respond this month, they have yet
to hear back from government.
“We can’t go on much longer
like this. Each day that’s passing
without a resolution to this problem
is hurting our businesses. If we
don’t get an answer this week (May
18), we’ll have to escalate the
matter,” one travel agent told TNW.
Meanwhile, Asata continues to
engage with the TMCs involved. The
association has also engaged the
Department of Tourism to assist on
this matter. “Meetings continue to
take place behind the scenes,” said
Asata ceo, Otto de Vries. “There
will be a detailed session at the
Asata Conference around Treasury,”
he adds.