during the breakfast briefing for contractors and consultants, Durban
30 March 2007
Programme Director
Ethekwini Municipality Speaker: Councillor James Nxumalo
Members of the Portfolio Committee
Members of Parliament present
Councillors present
Head of Department: Doctor FB Madlopha
Members of the Business Community
Contractors and Consultants present
Members of the media
Ladies and gentlemen
This meeting is taking place after I had a series of meetings with the
emerging contractors in all the departmental four regions of this province.
Many challenges and possible solutions were raised.
The government remains an important role player in the development of our
economy. As early as 1994, major policy developments, and other strategic
interventions were initiated by the Department of Public Works to drive the
process of economic development and transformation forward, thereby making a
significant contribution to improve the lives of all South Africans. To achieve
this end, we needed to continuously engage ourselves, with all relevant
stakeholders in discussions that will drive such process forward.
I am pleased therefore that you, as critical stakeholders have responded to
our call to gather here today. The motive behind this breakfast meeting is:
* to engage you in discussions that aim at strengthening the emerging
enterprises, without weakening the established enterprises in the construction
industry
* to develop and strengthen relationship and partnership between our valued
service providers, particularly, contractors and Consultants, so that the
objectives, and the achievements of our department are felt by each one of
you
* to start a dialogue that encourages transfer of skills, and sharing of best
practices amongst ourselves.
This meeting will also enable the department to gain insight into what you
consider as both the challenges and opportunities for all involved in the
sector, so that indeed we as government are able to create a conducive
environment for all.
I must also state that the development of the industry must reflect the
development of our society, including full participation of women, youth,
people with disabilities etc.
The entire industry remains fragmented. There exists the malpractice of
fronting. There are still a number of potential and emerging contractors who
are unable to access business opportunities due to lack of appropriate skills
in the industry, contractors who have not yet developed to their full potential
to be able to "stand on their own". Some face difficulties to access credit;
generally, there is still an identifiable gap between the big contractors and
the emerging contractors. After 12 years of democracy, almost 80% of emerging
businesses are still in level 1 (tenders up to R200 000) unable to access
business opportunities. Although various pieces of legislations have been
introduced, these and many other challenges continue to undermine our efforts
to improve the economy for the benefit of all.
As the provincial department we do however, acknowledge the contribution
that the big business has made to assist this government meet the developmental
challenges set out in the Millennium Development Goal as they were adopted by
the Member States of the United Nations in September 2000 such as:
* eradicate extreme poverty and hunger
* promote gender equality and women empowerment
* ensure environmental sustainability.
In his State of the Province address on 14 February 2007 this year,
KwaZulu-Natal Premier Sibusiso Ndebele issued us with clear mandates and
responsibilities which will now serve as our guiding light for year 2007/8. Our
provincial theme this year is "Building the Economy Through Partnerships".
We need to respond by coming out with plans of action. It is inherent in the
above provincial theme that while we seek economic growth, we acknowledge that
it will not be possible without the active participation of all our partners,
including yourselves. We cannot realise this without your contribution in
conjunction with established business, communities, Government and all other
key role players. You are a key variable in the sustained growth of our country
and province.
Another government effort that is aimed at ensuring that as many people as
possible do become economically active in spite of the problem of unemployment,
is the Expanded Public Works Programme which many of us have heard about
already.
What I want you to bear in mind is that this programme is making its mark,
as a result the Minister of Finance Mr TA Mamuel, in his Budget Speech on 21
February 2007, indicated that a further R125 million would be allocated to the
Department of Public Works to improve co-ordination and oversight of this
programme.
Now, the question you may be asking yourselves is what sort of contribution
is expected from you. During the series of meetings through road shows I had
with the emerging contractors I pointed out to them that as government of the
day we have a duty to assist them towards becoming established contractors in
their own right. The department has developed a programme to empower the
Emerging Contractor.
Some objectives of the programme included are as follows:
* to create a conducive environment in which emerging contractors can
thrive, by facilitating access to:
* markets, being Department of Works KwaZulu-Natal contracts and other
markets
* financial support, being alternative contract financing options and security
requirements
* training and mentoring, in areas of business management, construction
management and financial management
* skills transfer through the promotion of joint venture.
We have placed skills development and capacity building high on the agenda.
Some of the programmes that we will be pursuing include, the Exit Strategy of
the Construction Learners. This will enable learners to put programmes that
will ensure that what they have learnt in a classroom setting can be sustained
and turned into job creation, for example learners forming co-operatives.
The Department is committed to comply with Broad-Based Black Economic
Empowerment Act (BBBEE Act). To this end the Department of Works, through its
policies will leverage its spending on infrastructure and capital projects to
create a structural procurement practice that prioritises ECDP contractors.
As we grow the economy, we must also make sure that a greater number of our
people are absorbed as workers. This will happen if every project follows the
Extended Public Works Programme (EPWP) for the Implementation of Labour
Intensive Methods of Construction.
In his State of the Province Address, the Premier stated that at a
macro-economic level it is pleasing that we are doing better today than we did
yesterday. "The economic environment holds much promise and we need to rise up
now to take advantage of this opportunity to better the lives of our
people:
* The Gross Domestic Product-R (GDP per region) of the province is now the
second largest in the country after Gauteng, and the GDP â R growth rate rose
over fivefold from 1,0% in 1999 to 5,3% in 2005.
* This trend suggests that the provincial economy has the potential to reach a
10% growth rate by the year 2014, which is far above the Accelerated and Shared
Growth Initiative for South Africa (AsgiSA) target of 6,0%.
* Our provincial government has managed to reduce the unemployment rate from
36,3 % in 2003 to 29,9% in 2006.
* According to Global Insight, the percentage of people in poverty in this
province (poverty rate) decreased from 54,0% in 2004 to 51,9% in 2005.
* The literacy rate in the province has increased to 88,6%."
The contribution of the construction industry to Gross Domestic Product is
set to grow to 10% leading up to 2010. According to the Construction Industry
Development Board (CIDB) Affirmative Procurement has opened up substantial
opportunity to historically disadvantaged enterprises, but all stakeholders
acknowledge that this opportunity is not adequately translating into
sustainable capability and empowerment.
The Construction Industry Development Board (CIDB) also acknowledges that
South Africa's targeted economic growth rate necessitates a higher growth rate
for construction output. This will require the industry to more than double its
output and capability over a 10-year period. This potential represents a window
of opportunity for sustainable empowerment, enterprise development, sustainable
employment and skills formation.
This meeting represents the commitment from my department to involve you as
the critical stakeholder in addressing your own needs, and the needs of the
emerging contractors, thereby ensuring a long term productive capacity in the
construction industry.
This consultation is in line with the Premier's state of the province
titled, "Building the Economy through Partnerships". Indeed, it is through
partnership that we will be able to bring all racial groups equally on board so
that the programmes of government and available opportunities benefit all
irrespective of race, colour, gender, and background.
I urge all contractors and consultants here today and those who are
registered in our database and the Construction Industry Development Board
(CIDB) to empower emerging contractors in my department. Transfer your skills,
share your experience and make positive contribution in the economy by
uplifting emerging contractors and enable them to move up to higher grades.
In particular I am aware that skills shortage in the construction sector is
threatening to hold us back from attaining our full potential. When you look at
the average age of an artisan today you will be surprised to note that he is
typically white, typically male and is approaching the upper 50s. This is the
average profile of a skill that has become so necessary ahead of 2010 Soccer
World Cup and beyond.
Ladies and gentlemen, I request that each and everyone of you here today,
work together and build up a very strong working relationship so that the gap
that seem to exist between contractors and the consultants be closed.
We do not have any other time. The right time for such response is now. I
would like to make a humble appeal to you to avail yourselves to assist us in
training and mentoring of the emerging contractors not only in the area of
construction management but also in business and financial management as well
as skills transfer through the promotion of joint ventures.
Remember that government and the support institutions that we have created
can only do so much, but it is the collective responsibility that will help us
achieve our vision for a globally competitive construction industry, that will
see us through.
In closing, I would like to express my sincere appreciation for your
response. I hope this is not our first and last meeting, to me it is a new
beginning and a lasting relationship.
Together we have a responsibility to ensure that a better life for all is
realised.
Masisukume sakhe.
I thank you.
Issued by: Department of Public Works, KwaZulu-Natal Provincial
Government
30 March 2007
Source: KwaZulu-Natal Provincial Government (http://www.kwazulunatal.gov.za)
