The construction industry has experienced the negative impact of a shrinking economy, Covid-19 and site disruptions. This has exacerbated poverty, inequality, and discontent within the fibre of society. These ingredients have collectively contributed to widespread and various forms of civil unrest and site disruptions.

In recognition of these factors, there is a concerted effort by government and various entities to implement a plan to stimulate the economy and in particular, a Construction Industry Recovery Plan (CIRP).

Core elements of the CIRP as proposed by Department of Public Works and Infrastructure are to:

• Ignite South Africa's recovery and reconstruction effort with flagship initiatives society will rally around to build a new economy.
• Enable growth and reforming the economy for an inclusive, competitive economy.
• Carefully mobilise resources to ensure fiscal sustainability.
• Improve implementation and accountability through enhanced institutional arrangements.

Over the past few months, we have witnessed several announcements by various government entities regarding mechanisms to stimulate the economy.

A ten-year plan under the custodianship of Department of Public Works and Infrastructure is proposed. It is envisaged that its implementation will focus on the infrastructure delivery and maintained value chain. Given the consequences of the deficiency in a focussed maintenance plan across the national infrastructure, it is critical that maintenance is implemented alongside infrastructure delivery. The Infrastructure Fund will provide R100 billion in blended finance during this period.

The action plan includes both public and private sector participants.

National Treasury together with Infrastructure South Africa will oversee the compilation of projects with a bankable value of R1 billion. This will involve the reviewing of the infrastructure portfolio to identify the most viable projects for the private sector.

National Treasury will also firm up the policy position on public-private partnerships to promote private sector participation.

Infrastructure South Africa has identified the willingness of the private sector to invest in social infrastructure and seeks to transform public infrastructure financing using blended finance which will involve the combining of capital from the public and private sectors, development finance institutions and multilateral banks. They will also review the practicality of accessing pension funds as a source of infrastructure funding.

CIDB has been tasked to identify high profile projects for private sector finance that will benefit commerce and the construction industry without payback obligation on government. As the custodian of contractor development, CIDB will also work with client departments to implement contractor development. This will also include the restructuring of the Expanded Public Works Programmes to include the mainstreaming of women’s maintenance teams and social compacts. In addition, CIDB will also improve the risk management in tendering and evaluation of infrastructure contracts with the view of ensuring that contracts are not awarded to overstretched contractors and to those who under-price. To this end, contractor development programmes will be intensified.

With the implementation of this initiative the construction industry will enable a significant expansion in public infrastructure delivery, creating jobs, unlocking investment, and boosting aggregate demand.

 Victor Smith

Membership Manager