VIL­I­FIED

Black Busi­ness Coun­cil in the Built En­vi­ron­ment fu­ri­ous as con­struc­tion com­pa­nies fin­gered for cut­ting cor­ners

CityPress - - Business - LE­SETJA MA­LOPE le­setja.ma­lope@city­press.co.za

The Black Busi­ness Coun­cil in the Built En­vi­ron­ment (BBCBE) has come out guns blaz­ing against con­struc­tion com­pa­nies that have been im­pli­cated in the sec­tor’s price-fix­ing scan­dal, which is be­ing in­ves­ti­gated by the Com­pe­ti­tion Com­mis­sion.

On Fri­day, BBCBE sec­re­tary Gre­gory Mo­fo­keng lam­basted sev­eral of the com­pa­nies fin­gered for cut­ting cor­ners and trans­act­ing in bad faith af­ter ini­tially sign­ing vol­un­tary re­build pro­gramme agree­ments with gov­ern­ment last year.

WBHO, Ste­fanutti Stocks, Basil Read, Group Five, Aveng and Raubex signed on the dot­ted line last year with gov­ern­ment, com­mit­ting to col­lec­tively con­tribut­ing R1.5 bil­lion to the Tirisano Trust over 12 years. The Con­struc­tion In­dus­try De­vel­op­ment Board was sup­posed to mon­i­tor the com­pli­ance of the agree­ments.

Mo­fo­keng said that, since the agree­ments were signed, the BBCBE had been side­lined and its role re­duced to spec­ta­tors in­stead of ar­chi­tects of the pro­gramme.

Fol­low­ing the is­su­ing by gov­ern­ment of avail­able op­tions for the com­pa­nies, which in­clude to ei­ther avail 25% of the com­pany’s an­nual turnover or sell off 40% eq­uity to black in­vestors, the BBCBE said it dis­agreed with shares be­ing dis­posed of to black in­vestors.

“We don’t need black in­vestors who will ac­quire these shares and spend all their time play­ing golf and din­ing at up­mar­ket restau­rants, drink­ing ex­pen­sive whisky and smok­ing ex­otic cigars while brag­ging to their friends about their im­pres­sive in­vest­ment port­fo­lio in the con­struc­tion in­dus­try as they wait for their div­i­dend cheques or go off to con­clude another BEE trans­ac­tion in a dif­fer­ent sec­tor of the econ­omy,” Mo­fo­keng said.

“We want black share­hold­ers who un­der­stand how con­struc­tion com­pa­nies op­er­ate to max­imise the ben­e­fits that must ac­crue to black play­ers along their com­pa­nies’ value chain, such as sub­con­tract­ing, and ma­te­rial and equip­ment sup­ply.”

Aveng has con­cluded a R756 mil­lion (51% share) deal with Ku­tana Con­struc­tion, and Mo­fo­keng said the coun­cil was “en­cour­aged” by the trans­ac­tion, but he dis­ap­proved of Mur­ray & Roberts’ deal with the South­ern Palace-led con­sor­tium, which saw the for­mer sell­ing off sev­eral of its in­fra­struc­ture and build­ing busi­nesses to the tune of R314 mil­lion.

“We have worked closely with WBHO and Raubex to se­lect black con­sor­tiums that will ben­e­fit from the al­lo­ca­tion of work pack­ages,” Mo­fo­keng said.

“We note with in­ter­est from the gov­ern­ment’s me­dia state­ment that Ste­fanutti Stocks has iden­ti­fied two emerg­ing com­pa­nies to part­ner with. We state cat­e­gor­i­cally that, should Ste­fanutti Stocks not open dis­cus­sions with us on the reg­u­lar­i­sa­tion of these com­pa­nies and their will­ing­ness to part­ner with other black com­pa­nies and buy into our broad-based ben­e­fi­ciary model, we will not sup­port the part­ner­ship.”

He pointed out that the coun­cil ex­pected the com­pa­nies to trans­form op­er­a­tionally in how they en­gaged with black con­sul­tants, sub­con­trac­tors and sup­pli­ers, and also ex­pected the ma­jor­ity of the work to be given to black con­trac­tors.

He also took a shot at black com­pa­nies that he said seemed to think they had a birth right to ben­e­fit from the vol­un­tary re­build pro­gramme agree­ments.

“We want to make it very clear that, if you are a black com­pany and you don’t want to share the ben­e­fits of this pro­gramme with other black com­pa­nies ei­ther as con­sor­tium mem­bers, sub­con­trac­tors or sup­pli­ers of goods and ser­vices, we will make sure that you are ef­fec­tively re­moved from this pro­gramme. This pro­gramme must and will drive trans­for­ma­tion through­out the con­struc­tion in­dus­try value chain. The sad re­al­ity is that we have black-owned con­struc­tion com­pa­nies that rely on an ecosys­tem dom­i­nated by white-owned sub­con­trac­tors, sup­pli­ers and man­u­fac­tur­ers, and they are not pre­pared to give a chance to other black-owned value chain play­ers be­cause they are con­sid­ered to be small and un­re­li­able.”

Con­struc­tion In­dus­try De­vel­op­ment Board spokesper­son Kotli Molise said the or­gan­i­sa­tion could not of­fer re­sponses re­gard­ing the progress of the agree­ments im­me­di­ately be­cause it was “tied up with other com­mit­ments”.

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