Fil­lip Is Here For Small Con­trac­tors, Sub­con­trac­tors: Price­less Equip­ment Deal

Mmileng - - Contents -

Roads Agency Limpopo (RAL) has shifted gear up a notch in its suc­cess­ful emerg­ing and small con­trac­tor em­pow­er­ment pro­gramme.

RAL and Bar­loworld Equip­ment (BWE), a divi­sion of Bar­loworld South Africa, re­cently signed a Mem­o­ran­dum of Un­der­stand­ing (MoU) to em­power emerg­ing and small play­ers in the Limpopo con­struc­tion sec­tor.

As part of the MoU agree­ment, BWE will make its con­struc­tion equip­ments ac­ces­si­ble to emerg­ing main con­trac­tors and small sub­con­trac­tors on RAL pro­jects at com­pet­i­tive rates, in­clud­ing the on­go­ing main­te­nance of the equip­ments as per the com­pany’s Cus­tomer Sup­port Agree­ment (CSA).

The CSA pol­icy en­sures that equip­ments are ser­viced at reg­u­lar in­ter­vals and that the health of the ma­chines is main­tained.

BWE has been a dealer and dis­trib­u­tor of the marquee Cater­pil­lar (CAT) earth-mov­ing ma­chines and con­struc­tion equip­ments in


South­ern Africa for over 90 years.

RAL Chief Ex­ec­u­tive Of­fi­cer (CEO) Mase­la­ganye Matji says one of the chal­lenges with the Agency’s suc­cess­ful Small Medium and Mi­cro En­ter­prise (SMME) em­pow­er­ment pro­gramme, where the Agency ringfence as much as 30% of con­struc­tion pro­ject cost to the em­ploy­ment of lo­cal SMMEs and 10% to the em­ploy­ment of lo­cal labour­ers is the lack (own­er­ship) of the re­quired equip­ments to ex­e­cute pro­jects.

“What we see is that a small con­trac­tor end up hir­ing or leas­ing equip­ment from the main con­trac­tor at ex­or­bi­tant rates and by the time the pro­ject is done they are left with noth­ing, which re­ally de­feats the pur­pose,” says Mr Matji.

The MoU will min­imise the cap­i­tal and op­er­at­ing costs of con­struc­tion equip­ments and capacitate con­trac­tors to ef­fec­tively de­liver on road con­struc­tion and main­te­nance pro­jects.

RAL has spent close to R460 mil­lion on vil­lage-based SMMEs in the four years since 2015. But part of the money flows back to the main con­trac­tor who own and lease these ex­pen­sive and heavy con­struc­tion equip­ments and ma­chin­ery, as Mr Matji ex­plains.

Grow­ing the vil­lage econ­omy is in line with the Agency’s vi­sion of con­tribut­ing to the so­cio-eco­nomic de­vel­op­ment of Limpopo Prov­ince, by con­nect­ing the peo­ple of the prov­ince, us­ing road in­fra­struc­ture as a ve­hi­cle.

Apart from SMME Em­pow­er­ment, the Agency is also man­dated to cre­ate jobs and job op­por­tu­ni­ties in ac­cor­dance with the Ex­tended Pub­lic Works Pro­gramme (EPWP) guide­lines and the In­ter­na­tional Labour Or­gan­i­sa­tion (ILO), and to en­sure the train­ing of lo­cally-based work­ers with on-the-job and Con­struc­tion


Ed­u­ca­tion and Train­ing Author­ity (CETA) ac­cred­ited train­ing.

BWE CEO Emmy Leeka says his com­pany is also pas­sion­ate about trans­for­ma­tion, and will also of­fer en­ter­prise de­vel­op­ment sup­port to emerg­ing con­trac­tors as part of the agree­ment.

“We have train­ing fa­cil­i­ties to be able to train (op­er­a­tors) from a tech­ni­cal point of view. We are pro­duc­ing ar­ti­sans for us (BWE) and as well as the in­dus­try. Our acad­emy has train­ing sim­u­la­tors for op­er­a­tors and driv­ers, and it is cer­ti­fied,” says Mr Leeka.

“With the re­la­tion­ship that we will be hav­ing, by the time a pro­ject is com­plete, we can en­sure that we leave ca­pac­ity be­hind. And the lo­cals will be em­pow­ered to be able to con­tinue. And that is our vi­sion. That is how we can have sus­tain­able eco­nomic growth, par­tic­u­larly in those vil­lages.”

The MoU will not only im­prove the bal­ance sheet of emerg­ing main con­trac­tors and small sub­con­trac­tors but will also trickle down to op­er­a­tors and driv­ers, ef­fec­tively boost­ing job cre­ation and labour tar­gets. Be­tween 2015 and 2017, RAL has cre­ated a to­tal of 3 833 job op­por­tu­ni­ties.

Af­ter com­plet­ing the ad­vanced driv­ing/op­er­a­tor course on CAT equip­ments and ma­chines, driv­ers and op­er­a­tors will get cer­ti­fi­ca­tion that will equip and en­able them to get fur­ther and im­proved em­ploy­ment op­por­tu­ni­ties af­ter the pro­jects are com­pleted in their vil­lages, as CAT is a ubiq­ui­tous go-to equip­ment brand in the con­struc­tion in­dus­try.

Ra­masela Ganda, BWE Ex­ec­u­tive Head for Busi­ness Ser­vices re­spon­si­ble for gov­ern­ment re­la­tions, pro­cure­ment and shared ser­vices said the re­la­tion­ship with RAL is “a very ex­cit­ing start of big­ger things and ev­ery­one will ben­e­fit from this re­la­tion­ship”.

“We will change the lives of our peo­ple. As a start we will tar­get ten emerg­ing con­trac­tors, that we will en­sure they have the ma­chines, and can run,” says Ms Ganda.

Roads Agency Limpopo’s Strate­gic Part­ner­ship Ap­proach has been a key tenet of the Agency’s suc­cess­ful 2015-2020 turn­around strat­egy.

Since 2015, the Roads Agency Limpopo has raised over R482 mil­lion in fi­nan­cial and non-fi­nan­cial sup­port from the pri­vate sec­tor to aug­ment its con­straint bud­get and sup­port de­liv­ery of much-needed road in­fra­struc­ture in the ru­ral Limpopo Prov­ince, and the fig­ure is now hov­er­ing on the half a bil­lion rand mile­stone. Most of the con­tri­bu­tions come from the min­ing in­dus­try, but the agri­cul­tural and tourism sec­tors are very much part of this Strate­gic Part­ner­ship Ap­proach.

The suc­cess of this ap­proach, as Mr Matji ex­plains, is in the con­fi­dence the pri­vate sec­tor has on how the Agency han­dles its fi­nances and is­sues of gov­er­nance.

“This has re­sulted in in­creased con­tri­bu­tions and part­ner­ships, par­tic­u­larly from those who have had the ex­pe­ri­ence of work­ing with us. They in­crease those con­tri­bu­tions sig­nif­i­cantly in sub­se­quent pro­jects and part­ner­ships,” says Mr Matji.

RAL and BWE will es­tab­lish a joint team that will man­age ev­ery stage and as­pect of the part­ner­ship. The MoU will run for two years.

“The road to suc­cess be­gins with a road,” quipped Mr Leeka.

Pos­ing in front of an ex­ca­va­tor, part of the equip­ment that will be avail­able to con­trac­tors, are from left to right, Bar­loworld Equip­ment’s Lefa Mal­lane and Charl Groe­newald, Roads Agency Limpopo’s Kis­han Tulsi, Martin Ram­aboea and Mase­la­ganye Matji, BWE’s Emmy Leeka, Ra­masela Ganda and Butch Martens, and Cater­pil­lar rep­re­sen­ta­tive Michael Latham. At the back are BWE’s Ger­hard Vorster and Roger Lamb­son (ob­scure).

BWE CEO Emmy Leeka and RAL CEO Mase­la­ganye Matji signed a MoU at the Agency’s of­fices in Polok­wane re­cently. The part­ner­ship will give emerg­ing main con­trac­tors and sub­con­trac­tors on RAL pro­jects ac­cess to con­struc­tion equip­ments at com­pet­i­tive rates.

BWE CEO Emmy Leeka, BWE Ex­ec­u­tive Head of Busi­ness Ser­vices Ra­masela Ganda and RAL CEO Mase­la­ganye Matji are ex­cited at the prospect of ev­ery­one ben­e­fit­ting from this part­ner­ship.

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