Major construction firms reach transformative agreement with government

13 October 2016

The South African Forum of Civil Engineering Contractors, together with national government, on Tuesday signed an agreement with several construction companies, including Wilson Bayly Holmes-Ovcon (WBHO), Aveng, Murray & Roberts, Group Five, Basil Read, Raubex and Stefanutti Stocks, to accelerate transformation in the industry.

The Voluntary Rebuild Programme agreement will see the parties – which were involved in collusion recently uncovered by the Competition Commission – collectively make a contribution of R1.5-billion over 12 years to a social and economic development fund. This will be in addition to the R1.4-billion in administrative penalties already imposed by the competition authorities.

Overseen by Rural Development and Land Reform Minister Gugile Nkwinti, Transport Minister Dipuo Peters, Economic Development Minister Ebrahim Patel, Public Works Minister Thulas Nxesi and the construction companies’ CEOs, the agreement will also see each company committing to having at least 40% of equity in the hands of black South Africans, or commit to initiatives that will result in each of the construction companies mentoring up to three emerging black-owned enterprises to develop their skills.

The Construction Industry Development Board (CIDB) welcomed the agreement, with acting CEO Hlengiwe Khumalo noting that it embodied the principles of development and growth in the emerging sector, which were in line with the CIDB’s legislative mandate to advance the nation’s social and economic development objectives.

Following the declaration, Stefanutti Stocks CEO Willie Meyburgh and WBHO CEO Louwtjie Nel told Engineering News Online that the time had come to move past the collusion case and build the local industry.

Meanwhile, Nxesi said that, as his department oversees a number of significant tenders in South Africa, companies needed to understand that there would be “serious implications” for involvement in collusion.

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