BEE failures ‘will cost’ construction

06 August 2014

South Africa’s construction and engineering industry has been told failure to comply with amended black economic empowerment codes by April 30 next year will leave them out of pocket.

The state wants more black-owned companies to participate in R4-trillion worth of infrastructure spend over 15 years.
But Consulting Engineers South Africa (Cesa) said built environment professionals could influence the “alignment” of the existing charter for the construction sector to achieve “meaningful transformation” in the industry.

Overall broad-based black economic empowerment statuses will drop when measured by the new codes due to strengthened requirements for black ownership in the industry, and skills and enterprise development.

Observers indicate a lack of clarity over the new codes and regard deadlines for implementation are unrealistic.
“Without adjustment to these requirements, (construction) companies are at risk of losing their government contracts. The tick-box approach to BEE is over,” Murray Chabant, CEO of empowerment consultancy Signa, said last week.

The requirement for revised sector codes comes after the competition authorities reached fast-track settlements with 15 construction companies for bid-rigging, market division and price-fixing in infrastructure projects leading up to the 2010 Soccer World Cup.

Competition Commissioner Thembinkosi Bonakele has also warned of further — much less lenient — penalties for firms that did not settle.
By Mark Allix
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