COMMENT
Procurement can
strengthen
SA’s core institutions
A
number of controversial topics
were tackled at the sixth
annual Western Cape Smart
Procurement World conference
in April, which created a strong
interactive forum for representatives from
the public and private sectors as well as
various organisations.
Focal areas included how the various
stakeholders can position procurement to
protect and strengthen core institutions
from within South Africa; and the high-
impact procurement innovations that will
build public confidence and the resultant
economic benefits at both national and
provincial levels.
In the policy debate, delegates
learned that the revised PPPFA 2017
requires that 30% of government
contracts be set aside to empower
SMMEs through procurement
processes. However, the amended
Construction Sector Codes has set out
a new disqualifier for built environment
professionals that only 50.1% of black
ownership would count for business.
Panel members discussed the likely
impact of this adjustment and how
feasible this actually is in the everyday
business environment. In addition,
they unpacked what the ripple effect
and impact such a policy will have, and
whether policymakers focus more on
ownership than they do on the impact of
such policies.
Good news for construction
companies is that construction industry
activity may increase substantially in
the third and fourth quarters of this
year, evidenced by the release of the
Afrimat Construction Index (ACI),
which increased by 1.2% in the first
quarter, year-on-year – an encouraging
figure considering the zero real growth
www.equipmentandhire.co.za
recorded for the broader economy since
the first quarter of last year.
Gross domestic product declined more
than 3% in the first quarter over the last
quarter of 2018 and the recessionary
environment of the construction industry
was reflected in that the index was
exactly where it was six years ago, says
economist Dr Roelof Botha. “We now
have a president who is committed to
economic growth and job creation. It
won’t happen overnight, but investor
confidence will increase,” he says.
Meanwhile, and at the time of
writing, President Cyril Ramaphosa is
yet to respond to the debate on his
State of the Nation Address (Sona),
where opposition parties have slated
him for weaving dreams rather
than spelling out concrete plans.
But despite opposition speakers
lambasting his speech for being ‘full
of vision, but with little substance’,
the gradual implementation of the
recommendations of the National
Development Plan, especially the
emphasis on creating new infrastructure
and targeting sectors with high growth
potential, could soon lift construction
to a new sustained growth path. So,
there may be substance there after
all – and many industry stakeholders
are hoping and praying for it with bated
breath. Read my interview with Crane
& Hoist Equipment SA on page 15,
where managing director, Brenden
Crous, and sales director, Louw Smit,
are optimistic that there will soon be an
upturn in the construction industry, with
positive things already happening. Crous
and Smit believe, for instance, that
government plans for high-density living
is definitely a plus for those in the tower
crane industry.
Tarren Bolton
[email protected]
Botha says that the biggest inhibitor
to growth in the construction sector,
however, remains the restrictive
monetary policy. The best performers
during the first quarter of 2019 were
the values of building plans passed and
buildings completed, when compared
with the last quarter of 2018.
In addition to government’s high-density
living plans, Botha says that another
welcome development for construction
activity in Gauteng is an announcement
by Transnet that a concession will soon be
awarded for a public-private partnership
to build and operate a R2.5-billion inland
container terminal.
The terminal will be built on 607
hectares near Vosloorus and is expected
to catalyse a further R20-billion of
further logistics-related investments
over 15 years, while the Gauteng
provincial government will spend an
additional R6.5-billion to strengthen the
road infrastructure around the Tambo
Springs Logistics Gateway.
I hope you find the articles in this
issue of Plant Equipment & Hire
interesting, informative and insightful. If
you have any comments, suggestions or
insights, please email me at:
[email protected].
Enjoy your read!
AUGUST 2019
1