Business forums ‘aren’t like mafia’

FOR HELPING LOCALS GET 30% OF PROJECTS According to the JDA, this share is the right of local businesses, workers or subcontractors.

Local communities are no longer prepared to be excluded from job opportunities that come to their areas, so business forums are being used to access these opportunities.

Business forums are legitimate structures aimed at developing the skills of local business people, rather than a mafia that grabs big chunks of projects under threat of violence, according to two businesspeople who are members of business forums.

They were responding to allegations by the South African National Roads Agency (Sanral) that road projects countrywide had been brought to a virtual standstill by violence and threats from business forums, dubbed the “construction mafia”. Business forums allegedly demanded 30% of the value of projects for locals. This, Sanral said, was a misinterpretation of a Treasury regulation to promote subcontracting to small businesses.

The Cosmo City Business Forum in Johannesburg seeks to facilitate the process, starting with a meeting about upcoming projects with locals.

Brown Soodi’s Soodi Projects CC, specialising in weigh bridge construction, is a member of this forum. He said the forum aimed to access 30% of projects, as promoted by the Johannesburg Development Agency. What exactly this 30% comprised was not defined, he said. “Is it labour only, meaning the whole amount will end up in the pockets of local employees in the form of wages, or is it ‘fit and supply’, meaning it includes material?”

He said some big contractors dodge this and only 1% ends up with local businesses. “We want a breakdown,” Soodi said. “The bill of quantities is the starting point. If it says there is R10 for concrete, we want 30% of it. Then we all know what to expect.”

The Everton West Business Forum, which has 25 members, is growing fast. Siphiwe Tshabalala, managing director of Ukhozi Construction and Projects, is its chairperson. It is part of the greater Vaal Business Forum, which represents 15 to 20 business forums. Soodi and Tshabalala both said the subcontractors’ work must be perfect. They accepted that the principal contractor carries the legal responsibility and would therefore bring its own core team. If the principal contractors don’t play ball regarding the 30% local participation: “We stop everything. We go to him and say you cannot do this.”

If the principal contractor still won’t budge, the business forum sends a delegation to the client to ask for assistance.

“If the project stops, the contractor incurs penalties. It would not be the business forum that stops it, but the community,” Soodi said.

Some big contractors dodge this.