In a move that could remedy the lack of transparency in government tenders, the Greater Johannesburg Metropolitan Council (GJMC) and its mandated agent Intersite will instead auction off vacant land worth millions via the internet, with the help of SalesBid, a local provider of outsourced auction-focused web applications and other dynamic pricing solutions.
SalesBid has secured a deal to auction-enable the sale of 34 lots of state-owned land - the first time local government has gone the online auction route. The auction will take place on www.intersite.co.za, the web site of Intersite Property Management Services, which has secured a mandate to sell the land.
The sale is expected to generate in excess of R45 million, and the proceeds are tipped for investment in infrastructure development.
Jack Prentice, MD of Intersite, criticises current tender processes, saying they are typically shrouded in secrecy. He explains that closed envelope tender often lead to uncertainty regarding who took part in the tender, and on what basis the winner won. Also, as only one tender is allowed, this often does not lead to the best price being achieved for the land in question.
Prentice adds that the on-line auction process, which does away with a tender element and instead includes only a pre-qualification process, might well point the way for government wishing to sell land. "It is totally transparent," he comments. "Everyone sees the best (highest) bid and may better it. Based on the level of black empowerment in the bidding company, different discounts are given, to a maximum of 8%, but any qualified bidder can improve the last bid."
The site carries extensive instructions on how to enter the bidding process, but Prentice outlines it as follows:
"The bidding will be preceded by a bidder registration process, which runs from July 5 to 26, and serves as a pre-qualifying process for bidders. A market valuation price should serve as a guideline for any bids. The final acceptance of the bid will be subject to reasonableness and acceptance by the GJMC," he says.
"Developers can view the properties on sale and then download a pre-qualification document from intersite's website (www.intersite.co.za) or can obtain these documents from Intersite's head office." The pre-qualification process will result in issuing qualified buyers with a username and password which they will need to access the online auction system. Prentice adds that the subsequent bidding process will run from August 1 to August 14. "Bidders are scrutinised in terms of qualification criteria, such as black empowerment and financial backing," he says. "Bidders who do not have Internet access may bid at any of our offices, situated in Cape Town, Johannesburg, Pretoria or Durban." In order to enter a bid all bidders must be prequalified.
Rael Levitt, Group Executive of SalesBid, says the auction will be totally transparent to everyone taking place in the bidding process, through constant updates of the web site as every new bid is entered. This will allow the properties to fetch a true market price, which will be determined by changing demand.
The auctioning technology will be incorporated into the Intersite site by providing a link to the auction application, which resides on SalesBid's servers.
Bidders enter the auction from www.intersite.co.za, by clicking on an auction button. This links to the SalesBid servers, which serve the auction information. However, from a bidder's perspective, it appears to be part of Intersite's site as the 'look and feel' and branding is the same. Intersite can administer the auction information by means of remote access to the SalesBid system.
Levitt adds that final bid acceptance will however be subject to the landowner accepting the bid, in this case the GJMC.
The combination of a pre-qualification process together new online auction technology is a unique concept that should prove successful in making land tenders far more transparent and fetch the best possible price - benefiting both buyer and seller.
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SalesBid
SalesBid is an e-commerce solution provider focused on the use of dynamic pricing mechanisms to efficiently match corporate buyers and sellers. Its vision is to provide small to medium-sized enterprises (SMEs) with simple, yet tailored e-commerce solutions.
SalesBid uses cutting edge technology to deploy and manage e-commerce solutions for clients. The SalesBid solution is unique in that it allows clients to run the auction function from their own sites thereby maintaining their corporate image and brand and increasing traffic to the site, whilst still being managed and maintained by SalesBid.
SalesBid is a subsidiary of Auction Alliance Holdings with stakes held by Peregrine and African Harvest Capital. For more information visit www.SalesBid.com