State fails black builders
Black construction companies suffer from non-payment so often that the Black Business Council wants to set up a hotline.
Xolani Qubeka, the council's chief executive, said he knew about many black companies that had failed because of late or non-payments.
''I hear about new cases daily,'' Qubeka said at a press briefing at the National Empowerment Fund in Pretoria yesterday.
The empowerment fund announced it would give the business council a R3-million grant.
The money will be used for ''capacity building'' and research so the council could engage the government to ensure there is a legacy for the black construction industry in the new infrastructure programme, Qubeka said.
Construction companies are eager to get a slice of Transnet's R300-billion expansion plan and other billions to be spent by power utility Eskom and various government departments to wipe out the backlog in electricity-generation capacity and roads.
Unfortunately, the government is known to have a bad track record when it comes to paying service providers.
Sanyati Holdings, a listed company, went into business rescue proceedings last month after years of cash-flow problems.
The problems emanated fromthe Free State provincial government's failure to pay the enterprise for work done. Sanyati's experiences raised fears that the entire sector could be in trouble.
Qubeka said it was not only the public sector that concerned him.
,The proposed hotline would monitor late payment of contractors and keep a record of offenders, whether in the private or public sector.
Mike Upton, chief executive of construction giant Group Five, said there was a deep distrust between new black businesses in his sector and established white enterprises.
He said engagement was limited because black business was not organised. He suggested they should pool their resources and develop industry champions in different sectors.
"Certainly in my sector, black businesses feel isolated," he said.
He supported the efforts of the business council to get black business organised.
The empowerment fund said the R3-million grant was the start of ''an ongoing'' partnership between the two entities.
Philisiwe Buthelezi, the fund's chief executive, said a ''significant portion of this infrastructure expenditure should accrue to black entrepreneurs''.
The council also plans to set up a parliamentary office.