The Master Builders South Africa (MBSA), a national organisation representing the building industry, is none too pleased with Tokyo Sexwale’s proposal for a state construction company.

“We are very concerned with the proposition tabled by the minister,” said Tumi Dlamini, executive director of the MBSA.

“Our concern stems from the fact that South Africa already has an existing and established building and construction industry with the necessary expertise to deliver on both complex building and infrastructure projects as well as the housing needs, both in this country and abroad.”

Sexwale’s reason for suggesting the need for a state construction company was because of the large amount spent to rectify government houses due to inexperienced contractors.

“This does not take away the fact that some small companies have experience, but a lot of fly-by-nights take the taxpayer to the cleaners for their shoddy workmanship,” said Sexwale.

To this, Dlamini said: “The introduction of a state-owned firm will no doubt have a negative effect on the growth and sustainability of the existing building industry, an industry that is already under a lot of pressure.”

Construction companies Stefanutti Stocks, Basil Read and Wilson Bayly Holmes-Ovcon (WBHO) reported a decline in operating profits as well as headline earnings a share in their latest financial results. So too did road construction company Raubex.

Dlamini said government should rather improve its efficiency through skills and training projects for construction workers.

Frost and Sullivan analyst Sarah O’Carroll said government should first consider the success or failure of other sub-Saharan state construction companies.

“In Namibia, the National Housing Enterprise was established to assist government to increase the housing stock, particularly low- and middle- income houses. However, the state construction company no longer builds low-income houses, but is instead focused on providing middle-income houses,” said O’Carroll.

Source: businesslive.co.za
Image courtesy: Gallo