Tension between the government and the building and construction industry ratcheted up a notch yesterday when Consulting Engineers SA said it "strongly opposed" Human Settlements Minister Tokyo Sexwale’s plans to create a state-owned construction company.
The statement by the association for built-environment professionals comes days after black-empowered engineering and construction firm Sanyati Holdings missed publishing its annual results, citing the government’s inability to pay its bills on time.
However, the sector is still hoping for a slice of the government’s multibillion-rand infrastructure spend to revive its flagging fortunes. The industry is in one of its biggest slumps yet.
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But the Department of Human Settlements denied any decision had been made, despite Mr Sexwale having said last month that his department and the Department of Public Works were considering such a move.
"The state should not set up structures in competition with the private sector. They should be creating a platform and a conducive environment for the private sector to excel," Consulting Engineers SA president Naren Bhojaram said yesterday.
"We already have too much political interference in public tenders, whether direct or indirect."
The body said it was speaking on behalf of 470 firms employing more than 22 000 people.
The Department of Human Settlements said it would soon be calling on all role players to discuss how to get the industry to do "the right things".
"That’s exactly the debate the minister wants to have," Xolani Xundu, head of communications at the department, said yesterday. "There is no decision that has been taken to start a government construction company."
He said large construction companies were not involved in the provision of low-cost housing, and the government wanted contractors to partner with smaller firms and upgrade their skills.
"The minister raised that issue within the context of the problem the department encounters when it comes to some - not all - companies that continue to take the government for a ride when it comes to delivery of the (state) housing programme," Mr Xundu said.
The construction industry and the government have been at loggerheads since the 2010 Soccer World Cup. The Competition Commission’s investigation into claims of market-and price-fixing for World Cup infrastructure is continuing.
Consulting Engineers SA said the lack of infrastructure development due to projects not being undertaken, as well as tender processes taking up to three years to materialise, were in large part due to a lack of leadership in government.
"At provincial and municipal level, there is a grave lack of general engineering skill. The internal staff are not equipped to produce clear terms of reference or even assess the final tenders due to lack of experience," Graham Pirie, CEO of Consulting Engineers SA, said.
"This causes backlogs in the project process and spills over to the overall monitoring of deliverables.
"It is time to sort out the corruption and improve the process of procurement in the built environment. The private sector has a great deal of skill and experience and should be encouraged to assist government."
The industry body also cited inconsistency in the government’s leadership as a problem. Several CEOs, directors-general and top management had been suspended "due to alleged corruption".
Several listed infrastructure firms have been hit by non-payment by state agencies. Basil Read, Raubex, Sanyati and Wilson Bayly Holmes-Ovcon last month said the Free State roads department had accused contractors of corruption and bad workmanship and refused to pay them.
Consulting Engineers SA said yesterday it "strongly disagreed" with President Jacob Zuma ’s recent statements in Parliament, where he supported politicians being involved in private companies.
Trade and Industry Minister Rob Davies said late payment affected small, medium and micro enterprises negatively. "(Such companies) carry the heaviest burden as a result of late payments by government and big business, which creates numerous cash-flow difficulties... ." he said earlier this week.
Mr Davies said this continued to occur despite "numerous steps" by the government to ensure contractors were paid on time.