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R1.5 billion development fund

Written by Nosihle Shelembe
Major construction companies will collectively contribute R1.5 billion over 12 years to a fund that will be established for socio-economic development.

“The objective of the fund will be the development, enhancement and transformation of the industry, as well as the promotion of social infrastructure for all South Africans,” Economic Development Minister Ebrahim Patel said.

The fund will support initiatives that provide financial support to young trainee artisans and engineers from disadvantaged backgrounds and also provide support for the teaching of maths and science at public schools.

Other initiatives include funding for social infrastructure and the development and promotion of black-owned construction companies.

“It also includes funding the appointment of professionals to provide government with engineering, project management and other services to strengthen its capacity to deliver the public infrastructure so desperately needed through, among others, the secondment to state departments, municipalities and entities of skilled personnel from organisations operating in South Africa,” Minister Patel said.

The agreement was reached with companies with a combined annual construction revenue of about R45 billion, namely WBHO, Aveng, Murray & Roberts, Group Five, Basil Read, Raubex and Stefanutti Stocks.

According to Minister Patel, each of the companies will undertake further transformation initiatives with two models.

“Firstly, that companies become fully transformed, with at least 40 percent of equity in the hands of black South Africans or, secondly, that they commit to initiatives that will result in each of the construction companies mentoring up to three emerging black-owned enterprises so that they develop the necessary skills, systems, status and quantity of work to be able to sustain a cumulative combined annual revenue equal to at least 25 percent of each of the mentor companies’ annual revenue by 2023,” he said.

As part of the agreement, each company has signed a declaration to promote ethical and legal operations, free of collusion or corruption, and to confirm that they will expose, confront and eradicate any sign of wrongdoing in the industry.

Webster Mfebe of the South African Federation of Civil Engineering Contractors said the industry is committed to strengthening its partnership with government for the benefit of the country.

“We believe this partnership will reinforce the framework for a more sustainable and competitive industry and is set to advance the social and economic welfare of all South Africans,” Mfebe said.

The fund is expected to be launched in the next financial year.

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