July 13, 2024

Build Programme, A Glimmer Of Hope For Construction Industry And Social Development

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Public sector clients must contribute financially to a Build Programme Fund (BPF) for every project of the said value.

FILE PHOTO: Deputy Minister of Public Works and Infrastructure, Ms Bernice Swarts along with cidb Board Members during the launch of the BUILD Programme. PICTURE: Supplied

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Contributing to social development is a measure of success for clients and contractors when accounting for project delivery, writes Sibusiso Mtungwa

Over the past ten years, South Africa has been grappling with an economic stagnation that began in former President Jacob Zuma’s first term, averaging between 2.5 and 2.8 percent a year.

Two days before the country reported its first case of novel Coronavirus  (COVID-19), Statistics South Africa (Stats SA), announced that it had entered into its third recession since 1994, with a gross domestic product (GDP) having further contracted by 1.4 per cent in the fourth quarter of 2019. In the third quarter, the GDP had contracted by 0.6 per cent.

On the same day which a nationwide lockdown came into effect to prevent a breakneck viral transmission, Moody’s Investors Services downgraded credit-rating for South Africa to junk status, with a negative outlook. The long-awaited credit rating mirrored those of the two other American agencies, Fitch and Standard & Poor’s (S&P).

Since July 2019, Fitch had put South Africa on the sub-investment grade with a negative outlook, and so did S&P three months later. In the main, the three credit-rating agencies cited low GDP growth, which impinges on the country’s already high triple challenge of inequality, poverty and unemployment.

One contributor to the low GDP is the construction industry, which has been bereft of a requisite, massive infrastructural investment over the past decade to extricate the vast majority of people from a morass of poverty. The infrastructural investment is an indispensable catalyst for economic growth.

Apart from higher long-term GDP growth, South Africa requires infrastructural investment that would contribute to social development by creating an abundance of sustainable job opportunities to address its triple challenge. In this regard, there is a glimmer of hope.

Through a new regulatory framework, namely the Best Practice Project Assessment Scheme, better known as the B.U.I.L.D Programme, gazetted on 18 September 2020 by a former minister of public and infrastructure, Patricia De Lille, the government has factored in social development in every public sector construction and infrastructure project. This is valued above R20 million, with the Construction Industry Development Board (cibd) as a key role player.

“The B.U.I.L.D. Programme is a major step forward to create development opportunities for people and enterprises in the construction sector and to enable emerging contractors to grow their businesses,” explained Bernice Swarts, a deputy minister of Public Works and Infrastructure, delivering a keynote address at its launch on Thursday, 14 March 2024.

Essentially, every public sector project of the said value should ameliorate the construction industry. Contributing to social development is a measure of success for clients and contractors when accounting for project delivery.

All clients must include development goals in their project deliverables, stipulates the Build Programme, which, as the deputy minister further explained, “will ensure that social development goals are achieved through construction tenders issued by government”.

Each project should contribute to set standards, namely indirect targeting for enterprise development through construction works and development skills through infrastructure projects. Each standard sets out a minimum threshold for contribution.

To be more precise, the first standard requires a minimum of 5 percent of a project contract value and the second standard requires a maximum of development support of 0.25 percent of the project’s contract value. Clients must specify these requirements when calling for tenders

Public sector clients must contribute financially to a Build Programme Fund (BPF) for every project of the said value. “Through this fund, we are uplifting the entire construction industry through investments in skills development and the wider participation of emerging contractors, including women and the youth,” illuminated Bongani Dladla, a cidb Chief Executive Officer, speaking at the launch. Incidentally, the cidb offers support to emerging enterprises, including female contractors, to acquire certificates for construction management systems and run sustainable businesses.

Using the cibd Register of Projects (RoP), clients must report their project contribution to the Build Programme. Contribution benefits the industry as a whole, including emerging contractors.  Learners and graduates who seek work experience and young professionals who seek candidacy also stand to benefit.

Sibusiso Mtungwa is the CEO of Public Eye Construction and he writes in his capacity

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