Emperor’s Palace, Johannesburg, 9 September 2019
In what is arguably the most robust construction-related events in recent history, the Master Builders South Africa Congress pulled no punches in presenting the dire state of the construction industry and trying to find solutions to help struggling contractors and to revive the sector.
The panel discussions often became somewhat passionate and heated, and the presence of bodies such as the Federation for Radical Economic Transformation (FRET) certainly surprised the audience. However, the Congress resulted in concrete resolutions being formulated on how the industry will work together in resolving complex matters such as the sensitive issue of transformation in the industry, and how to tackle the culture of late and non-payment of contractors by the state and state-agencies.
The event was well attended by some 210 delegates representing all facets of the construction and related industries, including the full staff complement and office bearers of Master Builders South Africa – as well as a number of its Past Presidents; Master Builders Associations from all regions of the country; Directors of Government Departments; the South African Police service (SAPS); the SA Reserve Bank; the South African Forum of Civil Engineering Contractors (SAFCEC); the Construction Industry Development Board (CIDB); the National Federation for Building Industry; the Forum for Radical Economic Transformation; various industry Sector Charter Councils; the Black Business Council in the Built Environment (BBC-BE); the SA Association of Quantity Surveyors (ASAQS); the SA Property Association (SAPOA); the National Union of Mine Workers; the Construction Education Training Authority (CETA); the Joint Building Contracts Committee (JBCC); National Home Builders Registration Council (NHBRC); the Federated Employers Mutual Assurance Company (FEM), amongst others.
Setting the scene in his opening address the President of MBSA John Matthews, noted that such forums were critical to break the log jam inhibiting the growth of the construction sector and the economy. “The show must go on,” he said. “It is our collective responsibility to heed the call to continue to seek solutions.”
The keynote speaker, Mr Choeu Makabate of the Faculty of Engineering and the Built Environment, Centre for Applied Research and Innovation in the Built Environment (CARINBE) of the University of Johannesburg, presented his report on “The Collapse Of Construction Companies In South Africa And Implications For The Sector” which was commissioned by MBSA.
Makabate noted that contributing factors include inter alia: late or non-payment of contractors resulting in their inability to pay suppliers and subcontractors and the misinterpretation of pieces of legislation which resulted in the emergence of Community Business Forums – commonly known as the “construction mafia”. Other factors cited included the economic decline experience since 2018 which has resulted in a negative impact on infrastructure investment; the reduction in infrastructure spending post-2010; and corruption in the public and private sectors. These challenges had in-part, resulted in the liquidation of major construction companies in South Africa, and negatively affected emerging contractors’ sustainability.
[The full report will soon be available online at www.sabuilder.co.za]
The Resolutions of MBSA Congress 2019 were summarised by MBSA Vice-President, Vic Naidoo as follows:
1. Re-model Construction Industry Procurement System;
2. Aim to re-establish trust (between all parties – contractors/professional teams/clients);
3. Engage with all legitimate role players such as industry bodies and forums, including the Forum for Radical Economic Transformation;
4. Look at role of “implementing agents”. Engage closely with National Department of Public Works (NDPW) – raised by the Association of South African Quantity Surveyors (ASAQS);
5. Evaluate and review the tender framework, including training requirements;
6. Engage CIDB on 30% set aside for SMMEs, designated groups (Some felt the CIDB’s draft standard on issue should simply be scrapped).
7. Look into circumstances to claim Force Majeure provided in the JBCC Principal Building Agreement
8. Consider the effect on the building industry with property developers’ preference to invest in countries other than RSA.
The MBSA Annual General Meeting, a closed session, followed the Congress formalities. Here John Matthews and Vic Naidoo were both re-elected for their second terms as President and Vice-President respectively.
The Master Builders banquet followed in the evening – the highlight of which was the announcement of the winners of the National Safety Competition, in which the overall winner of Category I for projects of over R750 million was the River Creek Deloitte project currently under construction by WBHO.