Construction sector faces many challenges: Gigaba

Thursday, October 17, 2013

Pretoria - Although government considers the construction sector as part of the country’s economic fibre, the sector is confronted with major delivery challenges, says Public Enterprises Minister Malusi Gigaba.

“The delays and disruptions, poor site management, time and cost variations, skills and competence issues, lack of quality improvement processes, 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,” said Gigaba.

He was speaking at the KPMG Global Construction dialogue in Sandton on Wednesday. The minister said the sector was large and complex, and further complicated by the vast number and range of employees.

Investing in human capital in order to attain improved construction quality was also important.

Gigaba highlighted the issue of acute shortages of trained artisans and first level supervisory staff, which has an impact on the demands for quality control, standard operating procedures and training, among others.

“The shortage of these skills is further exacerbated by the aging 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,” said the minister.

Although larger contractors were implementing programmes to address skills issues, smaller contractors and new entrants did not have the resources to address quality factors.

“The Presidential Infrastructure Coordinating 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,” Gigaba said.

In June, the Competition Commission ordered 15 construction firms to pay penalties amounting to R1.46 billion for collusive tendering.

“The recent exposure of anti-competitive behaviour through cartels imposes an economic and social cost to South Africa and many developing countries,” he said, adding that such conduct was unacceptable.

“This anti-competitive behaviour not only hampers the development of the economy as a whole but it also impedes the employment creation imperatives of government in general.

“This 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,” the minister said.

Because 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, Gigaba said this made the sector very prone to competition law infringements.

Government intends to expand the country’s infrastructure capacity.

“By the end of this administration’s term of office, R1 trillion will have been spent on infrastructure expansion,” said Gigaba. –

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