Sanral ‘in breach of state deal on BEE’

WBHO has issued a scathing response to the South African National Roads Agency’s (Sanral’s) announcement that it will do business only with companies that are at least 51% blackowned and have a minimum B-BEE Level 2 rating.

Sanral was flouting government policy in its draft transformation strategy announced on Friday, WBHO said.

The group is among seven JSE-listed construction and engineering entities party to the Voluntary Rebuilding Programme (VRP) — also known as “the settlement agreement” — signed with the government to speed up transformation in the industry.

In some cases, these companies have quit the local construction market or have sold 51% in their South African construction operations to black-empowered entities. Others will mentor up the three blackowned construction groups over seven years, or will sell at least 40% of equity in their South African construction operations to such groups.

“We take note with concern of Sanral’s draft transformation

policy and will engage with them during the next few months,” WBHO said. “Unfortunately, this policy does not take cognisance of the settlement agreement. We hope that when [Sanral publishes its] final transformation policy, it will incorporate our and the government’s commitment to the VRP.”

“It is also a concern that the [Sanral] policy does not take cognisance of the revised construction sector scorecard, which promotes a balanced approach to transformation.

“It should be appreciated just how much the industry has transformed, some would say radically. We therefore believe it is unnecessary that the [Sanral] policy contains these restrictive conditions.”

Transport Minister Joe Maswanganyi said on Friday Sanral’s new draft transformation policy set “clearly defined targets” for the participation of black contractors, professionals and suppliers in all projects commissioned by the agency.

A maximum of 15 tenders a year would be issued to a single firm and contractors would be required to make use of Sanral-approved subcontractors.

Sanral CEO Skhumbuzo Macozoma said on Friday the entity was committed to going beyond the minimum requirements set by legislative and regulatory frameworks.

Group Five said on Tuesday that increased transformation requirements had been a trend for some time and it had “therefore expected these developments from Sanral”.

Raubex said on Tuesday it was in a closed period and could not comment. “However, we can confirm that the business is a BEE level 2.”

Aveng, one of the JSE’s largest construction and engineering groups, said on Tuesday that executives were travelling and could not comment on Sanral’s actions.