31
Branching out
REGIONAL REPORT: SOUTH AFRICA
july-august 2013
international
construction
“There has been a complete mistrust between
the private sector and government,” said Tumi
Dlamini, executive director of the Masterbuilders
of South Africa, the industry’s representative
body. “Hopefully now that the process is coming
to an end, we will have finally won a measure of
understanding between the two parties.”
Slow payment
The competition issue also made it difficult for the
industry to take up its own issues with South Africa’s
government, including the slow implementation
of contracts, and even tardier payment for work
delivered.
Last year, for instance, contractor Sanyati closed
the lid on its empty coffers and filed for bankruptcy
after millions in outstanding payments for as many
as 23 government contracts were not paid. More
than 2,500 jobs were lost in the debacle. At the same
time, promised projects are simply not happening.
“It does not bode well for the industry when projects are not
being signed off,” Ms Dlamini said. “This is affecting growth
because we depend on government to support industry.” She
added that industry leaders were keen to rebuild their relationship
with government.
“This is something we need to talk to government about. The
CEOs of the biggest companies want dialogue.”
The industry was relatively insulated from the credit crisis of
2008 by the race to complete infrastructure for the 2010 World
Cup. But as the jobs were signed off, companies found themselves
sitting with excess capacity and dwindling new contracts.
Earnings at South Africa’s biggest construction group, Aveng,
fell -58% in the 12 months to June last year, reflecting industry-
wide doldrums.
Contractor Geopile Africa
uses Atlas Copco HB 2000
breakers to install piles in
South Africa’s Northern Cape
for a solar power project.
The country has a rapidly
emerging solar energy
industry.
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