Fillip Is Here For Small Contractors, Subcontractors: Priceless Equipment Deal
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
“THE MOU WILL MINIMISE THE CAPITAL AND OPERATING COSTS OF CONSTRUCTION EQUIPMENTS AND CAPACITATE CONTRACTORS”
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
“THE ROAD TO SUCCESS BEGINS WITH A ROAD”
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.