Chinese construction deals draw calls for ring-fencing
SA companies miss out on major Sanral projects
Calls are growing for the government to ring-fence mega construction contracts for South African companies after the South African National Roads Agency (Sanral) awarded three lucrative contracts to Chinese companies.
The agency this week finally awarded four of the five tenders it cancelled in June – after its board raised several issues on how they were awarded.
The tenders are:
• N2 Mtentu Bridge (R4-billion)
• N3 Ashburton (R2.4-billion)
• R56 Matatiele (R1.2-billion)
• N2/N3 EB Cloete Interchange (R5-billion)
Three of the tenders were awarded to China Communications Construction Company Ltd (CCCC) and China State Construction Engineering Corporation (CSC).
Roy Mnisi, executive director at Master Builders South Africa, said the industry was worse off than five years ago, and many construction companies had been liquidated. He said very little had been done to increase investment in infrastructure development and maintenance.
“Of late, the industry has been very concerned about the extent of the involvement of Chinese companies in civil engineering work awarded by Sanral. We believe that government must consider ring-fencing some mega projects for South African companies,” he said.
“There is a need for all construction sector stakeholders to work together to rebuild the sector, which is slowly dying. Prior to and during 2010, South African construction companies were able to build roads, stadiums and recreational facilities without any foreign companies. That capacity has deteriorated significantly. Government must bring reforms to protect local capacity to save jobs and protect the national pride.”
China has been South Africa’s largest trading partner for 12 years in a row. Chinese companies have invested heavily in South Africa over the years with brands such as Baic, FAW, Haval and others having established plants in the country.
The Asian giants are also a key member of BRICS (Brazil, Russia, India, China, and South Africa).
Marianne Vanderschuren said the move to award the tenders to Chinese companies was a vote of non-confidence in the country’s construction industry, which is “beaming with talent”.
“In light that this country has significant work to do in enabling economic recovery, the awarding of up to R6.65-billion worth of Sanral tender funds to foreign contractors is disappointing. Although South African tenders usually call for the use of local materials, and labour, we can’t be sure that these requirements will be honoured by foreign companies as experiences throughout the rest of Africa do not suggest this.”
However, Black Business Council in the Built Environment (BBCBE) called on local companies to do a deep reflection and not merely cry foul.
BBCBE CEO Gregory Mofokeng said: “If black-owned companies had tendered and understood the pricing, we could be talking a different story right now. We are saying that black companies should have placed themselves to partner with international companies or big local construction companies.
“For example, Grinaker, which is now black owned, partnered with Stefanutti, and their project is that one of R2.5-billion, which is more than the Chinese. When this thing was done by the Germans, nobody stood up and protested, so why do we have this protest when it is the Chinese?”
He said the organisation was going to insist on the inclusion of black subcontractors, which includes black-owned women businesses.
“We need to agree when it comes to the procurement of material that the Chinese need to prioritise local companies to supply material. Even though we are aware that some of the material is not manufactured in the country, some will be imported from abroad. We expect that the material manufactured locally should be procured locally by the Chinese,” he said.
Government must bring reform to protect jobs and
national pride
Why is it that we have this protest when it is the Chinese?
Sanral spokesperson Vusi Mona said ultimately, it is the quality of a bid that wins a tender and not the nationality of the bidder(s).
“Following a fair, open and competitive process, the contracts for all four tenders were awarded to the tenderers which submitted the highest scoring eligible bids. Mtentu Bridge and EB Cloete Interchange are technically highly complex and challenging projects requiring applicable mega-bridge construction expertise and experience.
“The Chinese construction industry is one of the leaders in mega-bridge building in the world today,” he said.
CCCC is a majority state-owned, publicly traded, multinational engineering and construction company primarily engaged in the design, construction and operation of infrastructure assets, including highways, bridges, tunnels, airports, oil platforms, and marine ports.
It is listed in Hong Kong and Shanghai and operates in 41 countries in Africa
Additionally, it is known for its The Hong Kong-zhuhai-macao Bridge, the world’s longest sea crossing bridge, which was opened to traffic in Zhuhai on 23 October 2018.
The company constructed most of the project, accounting for over 70% of the main works.