South Africa’s construction industry has been given a glimmer of hope, with state-owned enterprises (SOEs) Transnet, Eskom, the Airports Company of South Africa (Acsa) and the SA National Roads Agency (Sanral) advertising multiple multi-billion rand construction projects.
Louwtjie Nel, chair of listed construction and engineering group WBHO, confirmed this to Moneyweb on Tuesday, when the company released its financial results for the year to June.
“The re-emergence of large scale public infrastructure projects could result in an improvement in the local construction environment over the medium term,” he said.
However, Nel said the capacity of the industry as a whole has been severely reduced with the spate of corporate failures and exits from the construction market.
This resulted in minimal training within the sector and a significant emigration of skills.
Nel said progress has been made by government in restoring good governance within SOEs and that future opportunities exist for well-run mid-tier and emerging construction businesses to grow and fill the gap.
However, unrest and disruptions from communities, business forums and taxi associations are a concern.
Nel says they have become commonplace and increasingly violent, threatening the safety of the group’s people and impacting productivity.
“This unlawful activity needs government intervention and urgent resolution,” he stressed.
Nel referred to Sanral’s recent announcement that it will issue major road construction tenders to the value of more than R40 billion over the next two to three years.
He said this bodes well for the sector, but cautioned that the execution of these projects is only likely to commence in WBHO’s 2021 financial year.