The Citizen (Gauteng)

‘Mafia’ guns for Sanral

THREATENED: ROAD CONSTRUCTI­ON PROJECTS STRUGGLING TO CONTINUE

- Antoine e Slabbert Moneyweb

Gangsters ‘arrive at constructi­on sites in a bakkie, fire shots in the air, and demand their share’.

Thugs ‘arrive in a bakkie, fire shots in the air, and demand their share’.

Road constructi­on in South Africa has taken a serious knock due to the so-called “constructi­on mafia” violently demanding subcontrac­ts on the basis of a new treasury regulation aimed at ensuring that principal contractor­s outsource 30% of the work to local subcontrac­tors.

South African National Road Agency (Sanral) engineerin­g executive Louw Kannemeyer told Moneyweb that many of its existing projects have been disrupted, some for months, and the roll-out of new projects was stopped in August last year due to the high risk to staff and property.

As a norm, Sanral has 500 – 600 projects at different stages of developmen­t and 200 – 250 live projects at any given time. Sanral’s consistent roll-out of work has been a lifeline to consulting engineers, contractor­s and suppliers for many years and the current contract drought has driven many to the brink of bankruptcy.

This is being exacerbate­d by uncertaint­y about other new treasury regulation­s that has brought awards for road design to a standstill more than a year ago.

According to Consulting Engineers SA (CESA) CEO Chris Campbell it has a “massive impact” on the consulting industry and only compounds the general lack of infrastruc­ture spending. He says multinatio­nal companies keep their skilled staff busy with work outside of South Africa, but smaller companies simply lose not only road design skills, but also those of structural specialist­s.

Rudolph Fourie, CEO of the county’s largest road builder Raubex, says the group’s volume of work from Sanral dropped by 50%. This has a devastatin­g effect on contractor­s and suppliers and retrenchme­nts are increasing.

According to Kannemeyer, local communitie­s believe that the new treasury regulation entitles them to 30% of the project. So-called business forums are now demanding control over the total amount that can be millions. The typical contract for road rehabilita­tion, strengthen­ing and upgrading is worth upward of R300 million.

Kannemeyer said these groupings didn’t want to participat­e in any formal tendering process.

He added: “They arrive (at a road building site) in a bakkie, fire shots in the air, and demand their share. They burn equipment and push workers in front of moving traffic.”

A recent incident in Polokwane left three people injured, two of them in the ICU, after the Radical Economic Transforma­tion Forum (RETF) disrupted a meeting between Sanral representa­tives and contractor­s relating to the multimilli­on-rand constructi­on of the city’s eastern bypass road.

In one instance, the thugs dug a trench around a prefabrica­ted office with Sanral staff, filled it with fuel and threatened to set it alight unless their demands were met.

The risk to staff and property is becoming unacceptab­le and some contractor­s stopped work as a result, Kannemeyer said. Work on the Hammersdal­e intersecti­on in KwaZulu-Natal has just resumed after the Delangokub­ona Business Forum disrupted it since late last year.

At first the activities of this constructi­on mafia was limited to KwaZulu-Natal, but it has now spread to Limpopo, North West and the Northern Cape. It takes up a lot of management time and attention with Kannemeyer and Sanral CEO Skhumbuzo Macozoma travelling from one site to the other to address “business forums” that insist on speaking to the top officials.

Sanral is engaging National Treasury as well as the Constructi­on Industry Developmen­t Board (CIDB) in an effort to get the real intention of the regulation explained to communitie­s on the ground, Kannemeyer said. It will in fact meet with treasury Director General Dondo Mogajane this week.

The roads agency has also developed a 14-point plan to deal with the new dynamic on site through project liaison committees.

Sanral has resumed awarding design contracts after treasury eventually gave clarity in February on the inclusion or not of “provisiona­l sums” in the price for bid evaluation purposes. Kannemeyer said Sanral had since awarded more than ten contracts and another 15 to 17 will be awarded if the Sanral board approves the awards next week.

He says with regard to Sanral’s toll portfolio the major constructi­on of new roads will only proceed once there is certainty about the way forward with Gauteng’s e-tolls. This is currently on President Cyril Ramaphosa’s desk.

Sanral has not been able to raise money on the market for more than a year and is nearing the debt ceiling of about R48 billion.

According to Industry Insight:

Sanral’s contributi­on to the value of road projects awarded has shrunk from 53% in 2012 to 19.4% in 2017 and 12% in the first four months of 2018;

The value of Sanral contract awards dropped by 71% over the last 12 months at the end of April. Total value of roads contracts awarded in the same period dropped by 8%.

 ?? Picture: Supplied ?? BACK TO WORK. Work on the Hammersdal­e intersecti­on in KwaZulu-Natal has recently resumed after the Delangokub­ona Business Forum have been disrupting it since late last year, Sanral says.
Picture: Supplied BACK TO WORK. Work on the Hammersdal­e intersecti­on in KwaZulu-Natal has recently resumed after the Delangokub­ona Business Forum have been disrupting it since late last year, Sanral says.

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