22 February 2006
Public Works Minister Stella Sigcau has identified First National Bank (FNB)
and the Independent Development Trust (IDT) as strategic partners to assist
Emerging Contractors build schools and clinics. The two institutions signed a
three-year memorandum of understanding witnessed by Minister Sigcau in Durban
today to assist Government implement its Expanded Public Works Programme (EPWP)
unveiled two years ago to create a million jobs in five years.
IDT will ring-fence an estimated R700 million to establish a relationship
with FNB to build approximately 450 schools and create about 15 000 job
opportunities. In July last year Cabinet decided that the EPWP would be
up-scaled in order to increase its benefits. This deal will also ensure that
the EPWP increases its contribution to governmentâs Accelerated Shared
Growth
Initiative of South Africa (AsgiSA)
Initially, a total of 40 emerging contractors in the Eastern Cape and
North-
West are set to benefit from the partnership, which will focus on growing the
construction industryâs skills base and create opportunities for aspirant
contractors to enter the market.
Province: Eastern Cape
Estimated value: R600 millions
Estimated number of schools: 400
Estimated schools number of jobs: 12 500
Province: North West
Estimated value: R100 million
Estimated number of schools: 50
Estimated schools number of jobs: 2 500
Total
Estimated value: R700 million
Estimated number of schools: 450
Estimated schools number of jobs: 15 000
The programme will also be extended to KwaZulu-Natal and other provinces.
Skills shortage has been identified as one of the areas of concern in the
building industry, which is battling to cope with demand for commercial,
residential and public sector properties. As part of the partnership with IDT,
FNB will provide Emerging Contractors with working capital at affordable rates
previously unobtainable due to lack of credit history, experience, supplier
references and collateral. FNB has set up a dedicated team with a service
provider to develop and improve the Emerging Contractors project management and
financial management skills in construction.
In addition to providing standard financial services and working capital,
FNB will investigate the formulation of value-added procurement solutions for
the Emerging Contractors. To quality for assistance, the Emerging Contractors
should have project values not exceeding R1,5 million and must have graduated
from the
Department of Public Workâs Construction Incubator Programme. The programme
comprises a group of 81 medium-sized black contractors selected for mentoring
and training with a potential to become fully-fledged contractors capable of
executing multi-million rand building contracts and in the process create
jobs.
IDT will come to the party by offering support to the Emerging
Contractors,
including:
* waiver of performance guarantees in respect of projects lower than R1,5
million;
* timeout payments to Emerging Contractors provided that the necessary
documentation has been submitted;
* ensuring that the contracts awarded allow for a fair share of profit to
ensure the sustainability of the Emerging Contractors;
* ensuring that contracts awarded to the Emerging Contractors provide
continuity of work for two to three years to support entrepreneurial
development subject to acceptable industry performance standards and the
availability of contracts.
FNB has also partnered with National Urban and Reconstruction Housing Agency
(NURCHA), a construction finance company, to assist with the finance and
development of the emerging contractors by intermediaries over the period of
the contract. This is hoped, it will lead to the financial and operational
independence of the contractors over the medium term. Other services and
benefits offered by FNB to the Emerging Contractors will include, among others,
the provision of transactional banking accounts at favourable pricing;
dedicated Relationship Managers for all their business needs.
FNB Public Sector Banking CEO Modise Moatlhodi said the bank was committed
to contributing to the empowerment of the emerging contractors by creating a
sustainable model of value creation for their benefit. âAs a party to the
Financial Sector Charter, FNB has committed itself to working in partnership
with Government to mobilise resources for empowerment financing. FNB intends to
improve the levels of assistance provided to BEE companies through financing,
skills transfer and giving technical and administrative support and
assistance,â said Moatlhodi. As we enter the season of Hope, FNB is proud to
partner with government to deliver sustainable skills development and
enterprise creation, said Moatlhodi.
He concluded by saying that âsmall business is big businessâ. Minister
Sigcau welcomed the deal, saying it was innovative and relevant. âWe have
maintained that both the construction and property industries are national
assets which need to be transformed so they can respond adequately to the
socio-economic challenges of our countryâ.
âThis means that we must see significant numbers of black people and women
playing their rightful roles in these sectors. This will only happen through
training, mentorship and provision of finances by institutions such as FNB. The
time for all this to take place is now, not tomorrow,â said Minister
Sigcau.
âI have no doubt that today marks the start of the long-term relationship
and if we stay on the course, in no time we will have emerging from the
townships a new breed of the Murray & Roberts, Group Five WBHO and
construction conglomerates,â said Minister Sigcau.
Enquiries:
Thami Ngidi
Tel: (012) 337 2454
Cell: 082 888 0852
Xolisa Vapi
Tel: (011) 371 9330
Cell: 082 731 9646
Issued by: Department of Public Works
22 February 2006
Source: Department of Public Works (http://www.publicworks.gov.za)
