Address by MEC for the Department of Human Settlements, Mr Madala Masuku at the provincial Emerging Contractors conference, Hazyview

Since the advent of the Department of Human Settlements last year, a sense of fresh direction seems to be taking shape. The new mandate appears to be poised to address the challenges experienced by the department in the delivery of settlements.

The success of quality and dignity restoring services or settlements is dependent on the commitment by all partners within the built industry. Such a commitment must emulate the ideals set out at the Kliptown crafted blue print called the Freedom Charter.

The document committed for the delivery of services that will restore and improve the lives of the country's majority. On concrete terms, the manuscript advocates for the provision of houses, security and comfort for all. These and other undertakings sought to fulfil assurances that:

• all people shall have the right to live where they choose, be decently housed and to bring up their families in comfort and security
• slums shall be demolished, and new suburbs built where all have transport, roads, lighting, playing fields, crèches and social centres
• the aged, the orphans, the disabled and the sick shall be cared for by the state
• fenced locations and ghettoes shall be abolished, and laws which break-up families shall be repealed.

The successful realisation of these commitments will go a long way in restoring the dignity and bringing comfort to many homes in communities. After all, the creating of sustainable human settlements as the new approach dictates is about bringing warmth and hope to all people who appeared to have shattered dreams.

The Department of Human Settlements is all about settling communities in an integrated and sustainable manner. In achieving this endeavour, the department needs people like you seated here to deliver on this mandate.

In the last few weeks, the provincial Executive Council has been engaging with communities at all "administration challenged" municipalities though the famous outreach programme.

As the Executive Council, we remain resolute at correcting the abnormalities at those institutions, a surmountable task to benefit our masses. Through our interaction, a sense of understanding and sanity seem to prevail at some parts of those areas.

The department has made tangible strides in delivering quality services, engaged stakeholders in the three regions and visited municipalities and stakeholders, particularly contractors to look at challenges and ponder better ways to deliver on quality integrated human settlements.

Some of you seated here were part of interactions we had in the last financial year to tackle challenges facing housing delivery. Issues raised were generic and as such they needed urgent attention. As you may be aware, these included, among others:

• difficulty of being appointed to deliver on housing projects
• delays in payments of work rendered
• lack of proper feedback from the department on performance.

Yes, as a department, we acknowledge some of the impediments that have plagued your effective functioning, hence, the introduction of serious interventions. It is against this background that the department deemed it fit to devise better ways to deal with these issues. Plans to improve the situation which are already underway include the following:

• Supply chain management processes being improved to accommodate emerging and small contractors. Today's conference is aimed at coming with solutions to all the woes we have been facing.
• We are committing to adhere to the 30 days payment period to all contractors.
• As it has been the case, we will continuously create an enabling environment for tendering processes be done transparently as possible.
• Communication with contractors will be improved as well as monitoring and evaluation of the performance of the contractors.

As some of you who are having projects with the department, our SMS system is testimony to this commitment. This service assists service providers, particularly contractors like you to know and track their payments.

Our gathering here for the two days must, without any ambiguity, solely focus on the emerging contractors within the sector. The deliberations must try to come with tangible and implementable solutions to assist government to craft strategies and intervention mechanisms to support emerging contractors.

To these end, we as government believe that emerging contractors should undergo a certain of development and subsequently grow. At some stage, emerging contractors must outgrow that status and become financially and capacity sound.

Objectives

Today's conference has an underlying aim of supporting, creation and reinforcing an enabling environment for emerging contractors. Our deliberations should move towards the creation of a platform whereby the government (department) engages in a dialogue with sector forums (stakeholders) and emerging contractors in the province.

The conference is also expected to establish the extent to which the
Department's initiatives towards emerging contractors have improved emerging contractor's development since 2000.

Since the dawn of democracy, the department has delivered over 140 000 housing units despite serious constraints by both the contractors and contractors.

The Department of Public Works defines an emerging contractor as an enterprise owned, managed and controlled by previously disadvantaged individuals, and which is still overcoming business impediments arising from the legacy of apartheid.

Background

Emerging contractors play a significant role in the housing delivery chain and are the main employers of the local semi-skilled and unskilled labour. A study conducted by the national Department of Human Settlements found that 80 percent of the total developers interviewed used emerging contractors as sub-contractors in the delivery of top structures.

In most of the projects, emerging contractors participate in labour only contracts. Developers provide the capital and building material. These contractors are mainly skilled in bricklaying (33 percent), flooring and plastering (18 percent), plumbing (23 percent), roofing and carpentry (26 percent).

Emerging contractors are the main providers of employment for local residents as they employ general and semi-skilled labour force. Women are mostly employed in administrative, cleaning and bedding jobs although there has been a significant increase in women contractors in the government’s low cost housing programme.

Critical issues

The study conducted revealed eight basic constraints that impede small business sector growth:

• Sub-standard education and training: level of formal education of emerging contractors is very low
• Access to finance: financial institutions need security to finance emerging businesses
• Late payment by government: internal processes and poor capacity contribute to this problem
• Financial managerial skills: there is still a big challenge in the performance of cash flow projections
• Restriction to movement of labour: the movement of labourers to other areas is a problem (vis a vis)
• Lack of institutional support: few institutions in the industry are supporting the emerging contractors
• Construction skills gap: there is generally a disparity on project planning and management
• Additional constraints: challenges of racial discrimination, poor education and management skills still persist

Ladies and gentleman, human settlement is all about coordinating energies and strategies towards delivering proper and descent shelter. The participation of all the stakeholders at this gathering is a confirmation that all partners are aware of what their roles are in attaining this goal.

As we engage in serious discussions, we should all bear in mind of who are our ultimate clients that we are serving, beneficiaries. Our communities expect government to provide quality services in a form of human settlements. Likewise, we expect all our stakeholders to join hands in assisting the department to fulfil that promise to communities.

In the last few years, the department has moved with speed at addressing all the challenges that have bedevilled the delivery of settlements in a bid to start on a clean slate. Now that the playing fields are levelled; it is incumbent upon all of us, as partners, deliver on our mandate.

The department needs the services of quality contractors, whilst contractors need support from government towards sheltering our communities.

In a spirit of improving the lives of communities, let us join hands in fulfilling that dream. It is my conviction that all of us gathered here can help our beneficiaries out there to have roof over their heads, security and peace.

I now officially open the conference.

Thank you.

Source: Department of Human Settlements, Mpumalanga Provincial Government