The construction industry, which contributes about 3% to GDP and employs more than 1.3-million South Africans, is under threat from the construction mafia, which has disrupted more than 180 projects worth R63bn since 2019.
It uses tactics such as extortion, intimidation, violence and sabotage. Deputy finance minister Ashor Sarupen said these were not merely operational challenges but represented a critical stress test for economic governance.
Demands for up to 30% of contract value undermined the integrity of procurement systems and delayed critical infrastructure delivery, Sarupen said at the National Construction Summit in Durban on Tuesday.
Construction projects also have an unmatched multiplier effect. For every R1m invested in construction, more than three jobs are created. This is the highest multiplier across all sectors in our economy
— Ashor Sarupen, deputy finance minister
“Construction projects also have an unmatched multiplier effect. For every R1m invested in construction, more than three jobs are created. This is the highest multiplier across all sectors in our economy,” said Sarupen.
The sector added 176,000 jobs in the third quarter of 2024.
Sarupen said the government had identified infrastructure development as a cornerstone of economic recovery, with the 2024 medium-term budget policy statement reaffirming the commitment to shifting government spending from consumption to investment.
“This aligns with the president’s call to transform SA into a ‘construction site’ to drive inclusive growth and job creation,” he said.
To address challenges in the sector, the government is pursuing a three-pronged strategy: reforming public procurement, expanding public-private partnerships (PPPs) and increasing infrastructure investment. These include:
- enabling government entities to pay subcontractors directly, eliminating the delays and exploitation often experienced under the existing system;
- streamlining approval processes to reduce delays in PPP projects; and
- mobilising private sector funding to augment limited public resources.
Police minister Senzo Mchunu said at the summit KwaZulu-Natal, Gauteng, the Western Cape and Eastern Cape had the highest rates of all crimes, including rape, murder, gender-based violence and extortion.
“These provinces also have the most documented instances of criminal syndicates impeding project construction or execution,” he said.
It was crucial to package crimes on construction sites with others such as extortion, illicit guns, drug trafficking, mass transit crimes, critical infrastructure and other economic crimes, he said.
“If I could share one success story. At the George Mukhari Hospital in Ga-Rankuwa, Gauteng, there is a project under way: the building of an oncology unit. A group of alleged community members assaulted the site manager, damaged the property and stopped delivery trucks from delivering. A case was opened on November 9, with charges listed as assault, intimidation and extortion and trespassing.
“A strategic operation was conducted yesterday [Monday], and three males were arrested. We are not going to spend a long time condemning and lamenting about this. We are rather inviting our brothers and sisters who are on the wrong side to join us in constructing a SA we want.”
Mchunu said crime intelligence played a critical role in identifying emerging threats, gathering intelligence and locating suspects linked to the syndicates, while the organised crime unit made sure that was carried out.
“In addition to specialised investigative teams, visible policing combat units have been deployed to hotspot areas for patrols and crime prevention to stabilise the situation and address the violence associated with the syndicates,” said Mchunu.
“While we have made significant strides, we recognise police cannot tackle this challenge alone. The construction sector is complex, and the crime issues we face demand a multifaceted approach.
“To this end, the police service partners with a wide range of internal and external stakeholders, including state-owned entities such as Eskom, Telkom, Transnet and Gautrain, as well as government departments such as the National Prosecuting Authority and the department of public works and Infrastructure.
“The collaboration also extends to private sector partners, including Business Against Crime SA and the SA Revenue Protection Association. Through the partnerships, the police service fosters a strong working relationship, ensuring constant monitoring and alignment of strategies to maintain operational focus.”
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