Infrastructure plan ‘should boost transformation goal’
Black business wants slice of pie
Black and women-owned construction companies have asked the government to use the multi-trillion infrastructure roll-out announced at the inaugural Sustainable Infrastructure Development Symposium of SA to bring in more black players in the embattled sector.
South African Women in Construction president Kelikile Mteto said it was time that massive infrastructure programmes benefitted historically disadvantaged groups.
“The infrastructure roll-out we are talking about stands a very good chance of opening new opportunities. But the question is how many of those opportunities are going to land in the hands of black people, women, youth and people with disabilities?” she asked.
“The issue here is looking at the requirements for black people and women to participate in such massive infrastructure roll-outs. Most of the people who got deep pockets are in Stellenbosch. Women are right at the bottom, running survivalist businesses. We need a deliberate agenda to push transformation in the sector and economy,” Mteto concluded.
The government last week showcased 276 infrastructure projects with a total investment value of R2.3-trillion.
Black Business Council in the Built Environment CEO Gregory Mofokeng said the reason was no significant transformation in the supply side was because the government was dilly-dallying when it came to transformation targets.
“We must set the [BEE] targets higher so that these whites who have a hold on the supply side must know that if they don’t transform, then the government will take it upon itself to create black suppliers and manufacturers,” Mofokeng said.
Kgosientso Ramokgopa, the head of infrastructure and investment in President Cyril Ramaphosa’s office, said there were many opportunities for black players to benefit from the mooted infrastructure outlay.
“Part of the cabinet resolution was to impose a requirement that there has to be aggressive and ambitious targets in this built programme … we must ensure that we are creating black players upstream of the delivery of the asset. There is a need to disrupt the whole value chain,” Ramokgopa said.
South Africa’s economy has been struggling in recent years, with major construction companies closing shop or filing for business rescue. Group Five filed for bankruptcy last year. Basil Read, Esor and Liviero went into business rescue in 2018. Group Five and Esor stopped trading on the JSE last month. Stefanutti Stocks is experiencing financial difficulty, while both Aveng and Murray & Roberts have sold their Southern African construction and engineering businesses.
Ramokgopa said the collapse of big players in the sector presented an opportunity to facilitate the growth of black contractors. “The big construction firms represented another form of concentration. We must identify a few black players in the sector and guarantee them offtakes. As they grow, they will be able to even take their services beyond South Africa.”
Offtake agreements are project documents that provide long-term guaranteed cash flow and are critical to project finance loan approval.
We must ensure we creating black players upstream of delivery