Opportunities for emerging contractors as infrastructure takes off
A construction-led recovery of the economy must also lead to increased opportunities for black-owned and emerging contractors to participate more fully in a sector that has great potential for growth.
There is a broad consensus that investment in infrastructure will be the catalyst that enables the economy to rebound from the Covid-19 pandemic and the economic recession. Government has already taken far-reaching steps to create an infrastructure pipeline that will be funded by investments from both the public and private sectors.
The Construction Industry Development Board (CIDB) will be a critical player in this process.
Our primary task is to ensure sustainable growth in the industry by developing the skills of emerging contractors and building capacity through empowerment.
Private sector construction has always been a bellwether of a healthy economy. However, in a country such as SA, with its vast developmental challenges, public sector spending on construction is of equal importance.
Government recognises the critical importance of this sector. It also understands the urgent need to remove the obstacles and streamline the bureaucratic processes that have, in the past, hamstrung the ability of the construction sector to meet the targets for gross capital fixed formation set out in the National Development Plan.
The department of public works and infrastructure is playing a greater activist role as a clearinghouse for public sector infrastructure, and minister Patricia de Lille is taking a hands-on approach to resolving long-standing issues that prevented emerging contractors from receiving a fair share of work.
In his recent announcements, President Cyril Ramaphosa has reconfirmed the government’s commitment to accelerate infrastructure spending as a core feature of the broader plans to attract investment and lead the country out of the recession.
The establishment of Infrastructure SA (ISA), a dedicated unit within the presidency, is further proof of the importance attached to this programme. ISA serves as a single point of entry for the assessment, verification and strategic management of infrastructure projects.
Early success in this new approach can already be seen in the creation of a credible infrastructure pipeline, after high-level engagements between government, investors and representatives from the construction and engineering sectors.
More than 270 potential construction projects were submitted for consideration, of which 55 have already been approved by the cabinet. This represents a total investment value of more than R1.6-trillion and has the potential to create about 1.6m jobs.
A large number of these projects are aimed at the network industries — transport, water and sanitation, energy and connectivity — but public sector spending will also be directed towards areas such as affordable housing, student accommodation and municipal bulk infrastructure.
This is all good news for emerging contractors who are expecting to receive a larger share of construction activities and expand their own businesses to the point where they can hire more people and develop the skills which will enable them to participate on an equal footing in the industry.
There will be qualitative participation by such companies that will not merely be relegated to a subcontracting role, but will come increasingly to the fore as lead contractors on important infrastructure projects. Small and medium enterprises will be given greater opportunities to showcase their capacity and move through the construction grades, which will also contribute towards job creation and skills improvements in the broader industry.
The CIDB intends to play a catalytic role in this broad national effort. One of our primary mandates is to accelerate the transformation of the industry and increase opportunities for black-owned contractors and enterprises owned by women, the youth and people with disabilities.
In our five-year strategy, we have set achievable targets to increase access to public sector work for black-owned enterprises from 58% to 70%, and for companies owned by women from 24% to 35%. An important tool for the CIDB is the Register of Projects through which we monitor infrastructure activity nationally from the point where the tender is advertised, through the process of awarding and up to final completion.
We are also working closely with representative industry bodies through the National Stakeholder Forum, and we’re confident there will soon be important moves to streamline legislation, address pressing issues relating to payment guarantees for contractors and late payments, and the creation of a credible database of suppliers and service providers.
Gamede is the CEO of the Construction Industry Development Board.