By Lehlohonolo Lehana.
@GettyImages.
Public Works and Infrastructure Minister Sihle Zikalala has vowed to intensify Operation Pay-on-Time and urgently put an end to the failure of government to pay service providers in the construction industry within 30 days.
Zikalala was speaking at the National Stakeholder Forum convened by the Construction Industry Development Board (CIDB) which is an entity of the Department of Public Works and Infrastructure (DPWI).
The National Stakeholder Forum is comprised of contractors in the built industry, government departments and municipalities involved in infrastructure development, built industry organisations and councils, institutions of higher learning and other key players in the built environment industry.
The forum was convened in order for the Minister to gain insight from players in the industry and go through emerging trends and developments, respond to threats and new opportunities emerging within the sector.
“We will commence engagements with all contractors not paid on time. It is time that we fight bribery and corruption where payments are delayed in order to force them to pay. We are alarmed at the allegations that outstanding invoices amount to billions. We will intensify the Re a Patala campaign in all provinces, “said the Minister.
Re Ya Patala (We Pay) was launched by the DPWI October 2009 as means to address payment backlogs to service providers.
Responding to challenges faced by small, micro and medium enterprises (SMMEs) and emerging contractors around access to finance, Zikalala noted the historic partnership between the CIDB and the Small Enterprise Finance Agency (SEFA) for construction industry financing mechanisms to focus on financing small and medium contractors and cooperatives involved in the construction sector.
The partnership under consideration will see the CIDB contribute up to R150 million and SEFA matching that with R150 million over the medium term.
“The struggle faced by SMME’s in the construction sector requires innovation. Many collapse because they do not have access to finance and loans for building materials and other resources. We need to develop a finance institution led by the industry to support contractors,” said the Minister.
Stakeholders have implored the Minister to investigate and report on the escalating rate of the cancellation of tenders, especially big tenders by parastatals and institutions which is costing the construction industry billions of rands.
The forum noted that big state entities cancel tenders after contractors have spent money and time putting together infrastructure.
To mitigate the disruption of construction sites, Zikalala said that the DPWI would intensify social facilitation and not make it a “by-the-way activity” but would rather make it an integral part in all project implementation, across all spheres of government.
It is expected that this will ensure community buy-in, involvement and beneficiation, which will isolate criminal elements.
He said all large projects should have empowerment elements which supported up-and-coming professionals, and that subcontracting and localisation would be compulsory.
In this regard, the DPWI will develop a national facilitation framework for the built industry, where law enforcement will be meted out to those engaged in criminal activity such as extortion and not wanting to genuinely participate in the construction sector.
Zikalala believed that social facilitation, localisation and subcontracting would ensure that criminal elements did not use the community to shield their criminal conduct.