There’s a new way of doing business

BASIL Read CEO Neville Nicolau says he believes the construction industry is still suffering because it is largely living in the past.

In particular, he says it was the failure to adapt to new ways of doing business that got the industry into so much trouble with the competition authorities over collusion.

Companies argued that, because of the small size of the local market, it was not possible to bid for very large projects such as the World Cup stadiums without a certain amount of collusion. Nicolau disagrees. “Of course it is,” he says. “There is no need for people to get together. A lot of collusion was almost accepted behaviour in the industry until 2010. The industry had a way of conducting business and they got caught out.”

Transformation is another reason for the distrust between it and government.

“The industry has not transformed at the rate many other industries in South Africa have transformed.”

It doesn’t help that doing business with the government has more than its share of challenges — a concern for Basil Read, which relies on government business for more than half its revenue.

Still, Nicolau sees the industry’s dependence on government business as an opportunity rather than a risk. This is why, although “a lot of the big construction companies are looking . . . to move out of South Africa”, Basil Read is staying put.

“In South Africa there is a huge infrastructure need. The ruling party lost votes more because of service delivery than because of Julius Malema. There is a huge need for roads and sanitation and everything else,” says Nicolau. —