Moneyweb
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4 minute read
20 Apr 2022
6:49 am

Construction mafia creates crisis by derailing infrastructure projects

Moneyweb

Industry bodies call for law enforcement to address the problem.

Picture: iStock

The so-called construction mafia has created a crisis by derailing infrastructure projects that are a key component of the South African government’s post Covid-19 pandemic economic reconstruction and recovery plan.

It has contributed to frequent criticism of the government’s planned R96 billion infrastructure expenditure programme for its slow to non-existent implementation.

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Bargaining Council for the Civil Engineering Industry (BCCEI) operations manager Lindie Fourie said the problem of intimidation, extortion and violence on construction sites has reached crisis levels and requires an urgent and collaborative response.

The task of rolling back the disruption of vital infrastructure projects now needs all stakeholders to be actively involved in supporting renewed police action against these increasingly brazen criminal elements, she said.

National African Federation for the Building Industry president Aubrey Phalatse said many infrastructure projects countrywide have been disrupted by the construction mafia and believes law enforcement must isolate the criminals from people who have legitimate concerns and issues they want addressed.

Clouding issues

“It clouds our own issues. We champion transformation, we champion BEE [black economic empowerment]. That is now clouded in criminality, gangsterism and all of that. We can’t afford that,” he said.

Phalatse added that law enforcement is necessary so that contract execution can be done legally and legitimate business associations with proper structures can champion the cause of small, medium and micro enterprises (SMMEs) and black business.

“It can’t continue like this. I have got people who say they are even scared of tendering because they win the tender but then they have another challenge,” he said.

“It’s getting out of hand, it’s becoming ridiculous. Something has got to be done and there is nothing else other than law enforcement.”

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Phalatse said one of his federation’s members was awarded a contract for training and about 50 members of the ‘construction mafia’ came and sat down and were to be trained on tender pricing, costing and estimating – but these people said “forget that” and demanded to be paid 30% of the value of the contract without doing any work for it.

The “30%” relates to the 30% SMME sub-contracting requirement in the Preferential Procurement Policy Framework Act (PPPFA).

Government’s plan

President Cyril Ramaphosa admitted in his State of the Nation Address in February that South Africa needs to confront the criminal gangs that invade construction sites and other business places to extort money from companies.

Ramaphosa said this requires a focused and coordinated response and government has therefore established specialised multi-disciplinary units to address economic sabotage, extortion at construction sites and vandalism of infrastructure.

“We will make resources available to recruit and train an additional 12 000 new police personnel to ensure that the SAPS [South African Police Service] urgently gets the capacity it needs,” he said.

Reaction

Phalatse said he is “very excited” about the plan to confront criminal gangs that invade construction sites, particularly as it has been discussed and embraced by everyone in the Public-Private Growth Initiative (PPGI), a sector-based collaboration between government and business.

Fourie said the BCCEI is also encouraged by Ramaphosa’s announcement of a special police unit to deal with the construction mafia but stressed that it will need all stakeholders to give active support if this effort is to be successful.

“The BCCEI has developed an action plan to address the challenges in the civil engineering industry and we are reaching out to other players to ensure our response is collaborative,” she said.

Fourie said key aspects of the plan include working with stakeholders to effectively prevent interference in projects, as well as reacting proactively to instances of interference.

“With government working hard on its economic reconstruction and recovery plan, the country cannot afford its investments in infrastructure to be hijacked by local mafias,” she said.

Fourie added that the delays and damage caused are stalling the government’s job creation efforts because infrastructure works are among the quickest ways to stimulate growth.

Government infrastructure projects all include a range of constructive transformation measures, which are dutifully applied by contractors who legally win these projects, she said.

SA Forum of Civil Engineering Contractors (Safcec) CEO Webster Mfebe told Moneyweb last month that South Africa had set an ambitious target in the National Development Plan (NDP) of fixed investment accounting for 30% of GDP by 2030, but that it is currently contributing 14% to GDP.

“There is no hope on the horizon that we will be able to achieve that level of investment because of the slow rollout of public infrastructure investment plans,” he said.

  • This article originally appeared on Moneyweb and has been republished with permission.