Webster Mfebe on the criminal hijack of the construction sector
Every second week commissioner cancels meeting with sector
● Ten meetings with the national police commissioner to discuss tackling the construction mafia in SA have been cancelled in the past four months, says South African Forum of Civil Engineering Contractors (Safcec) CEO Webster Mfebe.
The latest cancellation came on the eve of the state of the nation address in which President Cyril Ramaphosa announced he is “prioritising” the fight against armed gangs that have forced contractors to abandon 84 infrastructure projects worth more than R27bn.
Mfebe says he would like to take Ramaphosa at his word, but “so far the lived experience of the industry is a negative one. Until we see people being locked up for long periods nothing is going to change.”
He adds: “At least it shows he is aware of the problem.”
But he should have been aware at least a year ago.
This was when Safcec sent him an “SOS” demanding urgent intervention “at the highest level” after contractors were forced to cancel two mega projects backed by German investors worth a combined R4bn.
Apart from an acknowledgement of receipt by his spokesperson and a promise to meet with the industry, no further response was forthcoming until Ramaphosa’s address in parliament this month.
Mfebe did manage to meet with the National Prosecuting Authority (NPA) in October.
They agreed that the disruption of construction sites should be dealt with in terms of the Prevention of Organised Crime Act, which he says is an important step.
“The biggest milestone is that this is now considered to be organised crime, to which resources will be allocated, as the president has indicated.”
He says the NPA “were shocked” at the extent of the problem, which Mfebe found alarming, given that cases have been well documented and publicised in the media.
He told them about a black contractor in Durban who was accosted by a “business forum” in 2016 demanding a 30% stake in his project. When he refused, he was “shot in cold blood”.
Nobody has been arrested, says Mfebe. “There have been 51 court interdicts against these so-called business forums [but] not a single person has been successfully charged.”
On the same day Mfebe met the NPA he was supposed to have met the national police commissioner, but the meeting was cancelled.
“There’s a synergy between the police and NPA with police action preceding prosecution,” says Mfebe. The fact that national commissioner Khehla Sitole has cancelled 10 appointments to meet with the industry doesn’t bode well for prosecutions.
The civil engineering contracting industry has by far the lowest business confidence index, says Mfebe.
“Theirs is a lived experience. As long as there is no change in the objective conditions on the ground they will have a dim view of economic prospects in the country,” he says.
The failure to deal with the construction mafia has had a devastating impact on local as well as international investment, he says.
“If the president sends envoys to woo investors, the question is: are there conditions on the ground, is the policy and legal environment such that investors would be able to get a return on their investment?”
Mfebe, 60, a former National Union of Mineworkers trade union activist and ANC MP, rejects the accusation that domestic investors are on an investment strike.
“That is not true, until conditions change,” he says.
What about the R2-trillion of cash reserves corporate SA is said to be sitting on?
“The only way to change that is to change the investment environment. The maintenance of law and order must be seen to have taken root.”
About 200 people with technical skills from the civil engineering contracting sector have left SA as a result of construction mafia activities, he says.
“We know their names and which countries they went to.”
This is just the result of one survey, he adds. He suspects the number is higher.
“And contrary to the popular belief that it is mostly white people who are leaving, recent research shows there are more black technical skills leaving the country than white.”
They include a black female engineer and her black engineer husband who have emigrated. They were both working on a R2.4bn German oil storage project being built by WBHO in Saldanha when it was hit by the construction mafia last year.
Staff were prevented at gunpoint from continuing their work and the project had to be abandoned.
WBHO CEO Louwtjie Nel said the group had lost 60 labour-days in the three months prior to that due to attacks on employees by armed gangs.
“The couple said they couldn’t stay in SA under these circumstances,” says Mfebe.
“This tells us the construction mafia is not targeting so-called white capitalists in pursuance of what I call fake radical economic transformation.”
He says “serious allegations” linking business forums to politicians at local, provincial and national level could “explain the lack of political will on the part of the police to get involved”.
“There are cases where police have been called by contractors, they rock up, shake hands and hug these people [the construction mafia], and then leave.
“The police have always said that if they find anything wrong they will act,” he says. But in spite of anecdotal evidence, “they’ve done nothing”.
At the very least, this suggests a complete failure of crime intelligence, he says.
“This matter has been prevalent since at least 2016. You cannot tell me that the intelligence services have not got a clue as to who is behind it.”
The scourge has not only hurt the contractors and their technically skilled employees, he says. It has killed subcontracting opportunities for black entrepreneurs.
“If projects are stagnant, everyone loses, including Sars, which receives no taxes because there is no economic activity.”
Ramaphosa noted in his 2018 investment conference that investment in infrastructure is what will ignite economic activity.
“It’s a no-brainer,” says Mfebe. “But since then he’s done nothing.”
There are cases where police are called, they rock up, shake hands and hug these people [the construction mafia], and then leave