B Sonjica: Conference of SADC Ministers of Public Works

24 April 2006

Programme Director,
Ministers present here today,
MECs present here today,
Representatives of the SADC Secretariat,
Senior government officials,
Distinguished guests,
Ladies and gentlemen,

Introduction

I am honoured to welcome to this historic occasion, my colleagues from the
Southern Africa Development Community (SADC) who have contributed to making
this event a reality. I am especially pleased that out of the 14 member states,
two thirds are represented at this forum. I am also very glad that we have
among us members of the Executive Council (ExCo) and senior government
officials who are an integral part of the global pool of brainpower without
which this initiative would never have been born.

To you all on behalf of the South African government and its people, I am
privileged to extend a very warm welcome to this forum organised officially to
look at how we create an enabling environment for the development and growth of
the SADC construction industry. This is a very exciting time for the
construction sector. It is exciting because after such a long time the sector
is showing concrete prospects for prosperity. The industry is doing much better
now than in the past. We are experiencing and expecting a boom in this sector
within the next five years in South Africa. We estimate that in South Africa
the construction industry contributes at least US$7 billion per annum. In this
regard our government is increasing spend on infrastructure going forward in
order to meet the challenges of the 2010 Soccer World Cup but also to address
backlogs in rail, electricity and housing among others.

We said in the report on the status of the industry last year that increased
investment in infrastructure posed a few challenges to the construction sector.
The construction industry remains the third largest employer in South Africa.
It provides work to over 500 000 people. It will therefore potentially need to
double its output over the next 10 years to meet investment demand. The
conditions are therefore right. The market forces are on our side.

The onus is now on us to rise to the challenge and meet the delivery
requirements. South Africa cannot achieve this alone. Our success largely
depends on the partnerships we are able to forge, especially within the SADC
community.

We as a sector can not fail the Southern African economy. We must make sure
that the benefits of these opportunities trickle down and are enjoyed by the
wider society and SADC as a whole.

I must caution, however, that it would be premature of us to start
celebrating these opportunities now before we have made sure that we have
created an enabling environment and laid a solid framework that would see these
opportunities translated into real and concrete outcomes.

Challenges facing the construction sector

There are a number of challenges facing the regional construction sector.
These, if not dealt with properly and with urgency, will forever impede the
development of the regional construction sector and reconstruction in the
SADC.

Skills shortage

It has become very apparent that the region does not have the sufficient
skills base to meet the demands of infrastructure delivery. This of course
varies from country to country. In some cases the shortage of skills relates to
numbers and in other cases it relates to the shortage of capacity. This is a
challenge that was foreseen as far back as 2000. However, as a sector we did
not pull our socks high enough to strategize on how we would deal with this
challenge and start planning for the future. It has become clear to us that the
accelerated delivery of infrastructure is driven by increasing levels of
investment but is impeded by our own inadequate delivery systems and
capacity.

Economic infrastructure drives a country’s industrial, commercial and
technological base and will contribute to issues such as improved
competitiveness and the overall well being of the population. South Africa
alone does not have sufficient capacity to deliver on all the projects that are
being planned and implemented currently. Quite often there is a tendency to
look overseas for this capacity without looking at our neighbours across the
borders. In as much as there is a lot to benefit by importing skills from Asia,
Europe, and Americas, this must not be done to the detriment of our region.
Charity begins at home! Hence the theme for this conference is “towards a
common development agenda.”

There are severe consequences resulting from the eroded skills base. For
example, the cost of construction has increased exponentially during the past
few years. It is likely to continue doing so unless a deliberate effort is made
to enhance the sector’s skills base. Already we see the construction cost
spiralling and surpassing inflation rates. It requires both government and the
private sector to combine forces in tackling this pandemic. This is a situation
we can not allow to continue. We must make sure that our skills base from
professionals to contractors to artisans is enhanced.

It goes without saying that any partnerships forged through this initiative
must pay a particular focus on skills development. We as a region can benefit
tremendously from the European community.

Developmental agenda

Given the context of our regional and continental construction sector, it
goes without saying that we need to develop a shared vision for the sector. We
need to ensure that whatever initiatives we get involved in promote the
development of the regional construction sector. If we forgot this, we would be
shooting ourselves in the foot. I want to urge you all that as we deliberate
and forge partnerships in these next few days, we must keep in mind that any
initiative and partnership has to contribute to the developmental agenda of the
regional construction sector. The developmental agenda encompasses a number of
aspects.

These include skills development, skills transfer; empowerment of local
communities, local contractors and local professionals; contribution to local
economic development and the development and growth of the sector.

Regulatory and policy framework

Some of the challenges facing our regional sector include the absence of a
regulatory framework and where this exists it is often fragmented and onerous
and is not able to provide a guiding environment for what happens in the
sector. Each SADC member state has its own regulatory framework which in some
cases frustrates service delivery or is ignored by development agencies which
provide financial and developmental assistance in that particular country.
Instead of discarding what exists, we need to assist in developing the
framework to ensure that it works for the sector and for the country.

I understand and acknowledge that most of our member states are in need of
developmental aid especially in the context of a shortage of financial
resources and the urgent need to deliver on infrastructure. I, however, want to
emphasise that such development aid must be structured and received in a manner
that does not just look at the product or service delivered. It must take into
consideration development, economical and social needs of the recipient
country.

Procurement reform

There is an urgent need for the SADC construction sector to put in place
mechanisms that will encourage procurement reform. This would include the
standardisation and streamlining of processes, whilst respecting each country’s
legislative framework. This will allow the regional construction sector to lay
a foundation for uniformity of standards and processes. It will also remove the
complexities attached to procurement processes.

We must make sure that our local communities, our people and our economies
benefit from any partnership, investment and any other initiative designed to
contribute to reconstruction in the African continent and the development of
the African construction sector.

As SADC ministries involved in the construction sector, we must also ensure
that we make a deliberate effort to create an enabling environment that
encourages partnerships to be forged. For instance, we must develop a shared
vision that will portray a uniform approach to the development of our sector.
We also need to engage with Ministers in other relevant sectors to ensure that
their policies and legislative frameworks do not in any way impede the
development of our sector. For example, we must engage with our Finance
Ministers to talk about the issue of tax with the Trade and Industry Ministers
to discuss issues related to trade and investment, with Labour to deal with
issues relating to skills development and labour practices. If we do not
synergise our strategies, we will find ourselves faced with the challenges of
trying to develop the economy while at the same time having our hands tied due
to lack of an enabling environment.

The forum

The forum that I am proposing we establish during this conference has as its
main purpose the establishment of a platform where we could develop a common
approach to the construction industry’s development, transformation and growth.
By your attendance at this conference you have already demonstrated your
commitment and support towards achieving our objectives both of establishing
the forum and of development the regional sector.

Tomorrow we will deal in detail with the forum including the terms of
reference of the forum, the support of the forum as well as the funding of the
forum. We must be cautious that we don’t create a structure that will be a talk
shop with no concrete outcomes. We must also realise that there are current
structures such as the SADC Secretariat, the NEPAD Secretariat and Southern
African Regional Construction Industry Council (SARCIC). We therefore need to
make sure that there is proper integration and synergies between the different
structures while emphasising the construction agenda.

Conclusion

In conclusion, I want to encourage all of us to forge forward with this
initiative and to support the SADC construction sector as it endeavours to
regroup and develop itself.

However, I must stress that we are making a collective effort as the SADC
government in order to ensure that the developmental agenda, empowerment
agenda, skills development agenda and transformation agendas are not
undermined.

I wish you a wonderful stay in South Africa.

I thank you!

Issued by: Department of Public Works
24 April 2006
Source: Department of Public Works (http://www.publicworks.gov.za/)