Crumbling agreement
COVID CRISIS: ‘EACH COMPANY MUST PLEAD ITS OWN CASE FOR DEFERMENT’ – SAFCEC
No blanket request from industry for deferment of Voluntary Rebuilding Programme instalment.
Only two of the seven JSE-listed construction companies that are signatories to the Voluntary Rebuilding Programme (VRP) settlement agreement with the government have confirmed that they are up to date with their payments.
The companies agreed in terms of the VRP agreement finalised in 2017 to collectively contribute R1.25 billion over 12 years to a fund to be established for socio-economic development and undertake further transformation initiatives.
Raubex chief executive Rudolf Fourie and WBHO company secretary Shereen Vally-Kara confirmed on Friday last week that their companies’ VRP instalment payment for 2020 were up to date.
Those behind with their payments
Stefanutti Stocks CEO Russell Crawford said Covid-19 had introduced a new challenge with respect to this settlement agreement and it was currently engaging with the government “to negotiate a deferment of the current year’s instalment”.
Group Five and Basil Read failed to respond to a request for comment, while Murray & Roberts group investor and media executive Ed Jardim said: “This isn’t a matter that Murray & Roberts is able to comment on at the moment.”
Aveng CEO Sean Flanagan said the SA Forum of Civil Engineering Contractors (Safcec) had written to Trade, Industry and Competition Minister Ebrahim Patel last year, adding “we await his response”.
However, Safcec CEO Webster Mfebe stressed his company had not made any approach to Patel on behalf of any VRP signatory “as each must plead their individual circumstances”.
‘Evidence of distress’
Mfebe added that Safcec would support any company that provided evidence of distress because the forum is “cognisant of the current poor trading environment that pre-dates the Covid-19 lockdown, which has exacerbated the situation”.
“There are many payment holidays which have been arranged by various players in the economy...
“So, it is not unreasonable to ask for the deferment of payment to protect the livelihoods of people because the construction sector is continuing to lose jobs,” he said.
Attempts to obtain comment from the department of trade, industry and competition was unsuccessful.
Additional transformation initiatives
The seven signatory companies also agreed to undertake further transformation initiatives.
The agreement included either becoming “fully transformed” with at least 40% of equity in the hands of black South Africans, or committing to significant mentoring initiatives for up to three emerging black-owned contractors.
M&R sold its southern African infrastructure and building business to an empowerment consortium for R314 million in 2016 and Aveng sold Grinaker-LTA to the black-owned Laula Consortium in December last year.
The remaining companies entered into mentoring agreements with emerging black-owned construction contractors.