Naf­coc slams Chi­nese ‘ar­ro­gance’

Pro­cure­ment prob­lems, lan­guage dif­fer­ences and al­le­ga­tions of dom­i­na­tion by the Chi­nese are ham­per­ing the con­struc­tion of the mo­tor plant

CityPress - - Business - MAX MATAVIRE busi­ness@city­press.co.za

Ten­ders for the con­struc­tion of the R11 bil­lion car plant at Coega’s spe­cial eco­nomic zone near Port El­iz­a­beth went out ear­lier this month, five months be­hind sched­ule. This comes amid nu­mer­ous prob­lems in­volv­ing pro­cure­ment and lan­guage dif­fer­ences that are said to be hin­der­ing com­mu­ni­ca­tion be­tween the par­ties.

The car plant is a joint ini­tia­tive be­tween China’s Beijing Au­to­mo­tive In­ter­na­tional Cor­po­ra­tion (Baic), which is the ma­jor­ity share­holder with a 65% stake, and the In­dus­trial Devel­op­ment Cor­po­ra­tion (IDC), which owns 35%.

Black busi­ness fo­rum the Na­tional African Fed­er­ated Cham­ber of Com­merce (Naf­coc) in Nel­son Man­dela Bay is ac­cus­ing the Chi­nese part­ners of “ar­ro­gance, intolerance and dom­i­na­tion”.

Naf­coc claims that Baic has side­lined and un­der­mined its mem­bers, ren­der­ing them as “use­less” and un­wor­thy of be­ing in­volved in the project.

The IDC con­firmed that the project was fac­ing chal­lenges. “This is typ­i­cal of Chi­nese in­vestors through­out the con­ti­nent,” said Naf­coc pres­i­dent Lithemba Sin­gaphi this week.

“They want to un­der­mine Africans. This is not hap­pen­ing here only. Look what they did in Namibia. They [Baic of­fi­cials] are ar­ro­gant and un­der­min­ing. They don’t want to talk to us. They have openly said they do not re­port to any­one here, but di­rectly to Beijing.

“They must know that this is a joint ven­ture and lo­cals have to play a part.”

Sin­gaphi said even con­struc­tion ma­te­ri­als, es­pe­cially steel – which should be sourced from South Africa – was be­ing im­ported from China.

He said they were told by the main con­trac­tor, Beijing In­dus­trial De­sign­ing and Re­search­ing In­sti­tute (BIDR), that lo­cal steel was of poor qual­ity.

Pre­sent­ing his an­nual re­port to Par­lia­ment last week, IDC CEO Ge­of­frey Qhena made ref­er­ence to the Coega project, say­ing: “We were not happy with all pro­cure­ment is­sues. The project is pro­ceed­ing now and the plant should be ready by June next year.”

Last year, when the project was launched, con­struc­tion was ex­pected to be com­pleted by the first quar­ter of 2018.

IDC spokesper­son Mandla Mpan­gase agreed with most of the is­sues raised by Naf­coc.

“The IDC has had sev­eral meet­ings with most, if not all, busi­ness for­ma­tions in the Nel­son Man­dela Bay metro,” he said.

“The most re­cent one was on July 14, where project in­for­ma­tion was shared.

“How­ever, there have been some chal­lenges, largely be­cause of lan­guage bar­ri­ers with the en­gi­neer­ing pro­cure­ment con­trac­tor BIDR. The IDC is work­ing on an ap­proach to deal with th­ese chal­lenges.”

The ten­ders is­sued this week are for the con­struc­tion of a paint shop, a bridge be­tween the paint shop, an of­fice block and sew­er­age treat­ment works.

Leon Bolton of Rousseau Probert Elliott, the project’s quan­tity sur­vey­ors, said the project was di­vided into six dif­fer­ent con­tracts and that ten­ders for the three main con­tracts – which in­clude the con­struc­tion of the main plant – were not out yet.

“Ten­ders for th­ese [the three main con­tracts] should be out by next month,” said Bolton.

Asked whether the de­lays to the joint ven­ture would in­crease to­tal project costs, he said: “With the project five months be­hind, this de­lay may in­flu­ence the cost ... We do not ex­pect a big in­crease in costs.”

Mpan­gase con­firmed that the con­struc­tion steel was be­ing sourced from South Korea, Spain and China.

“The clo­sure of Evraz Highveld Steel and Vana­dium, which man­u­fac­tured struc­tural steel for the con­struc­tion in­dus­try – the only one of its kind in Africa – has had a neg­a­tive im­pact on the lo­cal steel in­dus­try,” said Mpan­gase.

He said the steel struc­ture rep­re­sented 13% of the en­tire project.

Re­spond­ing to al­le­ga­tions by Naf­coc that BIDR was not reg­is­tered by the Con­struc­tion In­dus­try Devel­op­ment Board (CIDB) as a Grade 9 en­tity, and so did not qual­ify to con­duct the work it was do­ing, Mpan­gase said: “Some of the work pack­ages are sub­di­vided into sev­eral smaller work pack­ages, which in turn get sub­con­tracted to suit­ably qual­i­fied con­trac­tors in line with the ap­pro­pri­ate CIDB grading.”

Sin­gaphi said many wrong ac­tions were tak­ing place within the project and, de­spite Naf­coc hav­ing re­quested Small Busi­ness Devel­op­ment Min­is­ter Lindiwe Zulu to in­ter­vene, she had done noth­ing.

“We have phoned and writ­ten to the min­is­ter, but with­out suc­cess. We view this project as a cat­a­lyst to rad­i­cal eco­nomic trans­for­ma­tion,” he said.

Ef­forts by City Press to con­tact Zulu via email and tele­phone were fu­tile.

The Coega Devel­op­ment Cor­po­ra­tion’s spokesper­son, Ayanda Vi­lakazi, said: “Eleven lo­cal small, medium and mi­cro en­ter­prises have ben­e­fited from con­tracts worth R17.1 mil­lion that we awarded for bush clear­ance, site sur­vey and clear­ance, and geotech­ni­cal in­ves­ti­ga­tions.

“The en­tire site is ready. We have done our part and it is now up to Baic to start con­struc­tion.”

About 2 500 jobs are ex­pected to be cre­ated dur­ing the con­struc­tion phase of the ve­hi­cle plant.

SITE OF CON­FLICT The area at Coega’s in­dus­trial devel­op­ment zone af­ter bush has been cleared and lev­el­ling has taken place in prepa­ra­tion for con­struc­tion of the car plant

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