Major problems in construction sector – Gigaba

2013-10-17 08:19

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The South African construction industry is confronted with major delivery problems, Public Enterprises Minister Malusi Gigaba has said.

“The delays and disruptions, poor site management, time and cost variations, skills and competence issues... and lack of worker participation are among the challenges faced in the course of executing construction projects, and there is no doubt that substantial improvements in quality and efficiency are needed and are possible.”

He was speaking at the KPMG Global Construction Dialogue in Johannesburg yesterday.

Gigaba said numerous indications highlighted the acute shortages of trained artisans and first level supervisory staff, which impacted on the demands for quality control, standard operating procedures and training.

“The shortage of these skills is further exacerbated by the ageing profile of artisans in South Africa, the average age of whom is reportedly around 55 years old.

“This shows the danger that most of the people available to transfer skills are getting older and older and there will not be sufficient mentoring for the future generations.”

Gigaba said many of the larger contractors were implementing programmes to address their skills requirements. Smaller contractors, in particular new entrants, did not have the resources necessary to address these quality factors.

“In this regard, the Presidential Infrastructure Co-ordinating Commission (PICC) has developed a key scarce skills list and the private sector, particularly the construction industry, must more actively and robustly partner so that we can expand our skills base and even train more than the sector itself requires.”

He said the recent exposure of anti-competitive behaviour through cartels imposed an economic and social cost to South Africa and many developing countries.

“Such conduct is unacceptable because it undermines the benefits to the clients of receiving competitively priced bids.”

He said the anti-competitive effect in the construction industry not only hampered the development of the South African economy as a whole, but also impeded the employment creation imperatives of government in general.

“This therefore requires that there be a review of such public sector procurement processes and active steps are taken by public institutions to minimise the risk of collusive tendering in their procurement processes.”

He said South Africa was a small economy, with a limited number of general contractors who were capable of managing very large projects in the construction sector. This made the sector prone to competition law infringements.

Gigaba said the government considered the construction sector as part of the economic fibre which assisted in meeting economic and social objectives.

“We are committed to its success as it constitutes a significant portion of both the gross national product and of employment.”

In the current financial year, the construction sector contribution to the gross domestic product (GDP) grew from R4 billion to R31 billion, Gigaba said.

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