Govt shelves construction projects
Fin24

Govt shelves construction projects

2010-06-25 09:10

Pretoria - About 64 000 jobs in the construction industry were lost in the first quarter and this number could rise sharply in the short term unless projected government spending quickly gets into gear.

The database of the construction data service, Industry Insight, shows 161 public sector projects that have been postponed since the beginning of last year.

Industry Insight chief executive Elsie Snyman says the number of projects put out to tender moreover fell by a third in the first quarter compared with the first quarter of last year.
This resulted after the tempo at which projects were being postponed more than doubled last year.

While the rate of deferment started to slow down in the first quarter, this was simply because the number of tenders had dramatically declined. The industry's situation had therefore deteriorated.

In his budget speech in February Finance Minister Pravin Gordhan said government would spend R846bn on infrastructure over the next three years. Snyman points out that contractors have so far received little of this.

Further delays in government projects during 2010 will impact the industry heavily as the demand for residential construction remains weak, she says.

According to figures recently released by National Treasury, municipalities are, for instance, struggling to spend their capital budgets.

Snyman estimates that R10bn held by local municipalities is not getting through to the construction industry.

She says municipalities in Mpumalanga, the Free State and North West, for example, with three-quarters of the financial year behind them, have spent less than 10% of their housing budgets.

Gauteng municipalities have spent a mere 21% of their roads budgets.

The issue is therefore a lack not of finance, but of competent management and skills, she points out. This is at a time when the construction industry urgently needs government’s stabilising role to balance the lack of demand from the private sector.

- Sake24.com

For business news in Afrikaans, go to www.sake24.com.

Comments
  • Andrew - 2010-06-25 09:32

    Once again it proves that Jacob Zuma, his government and the Anc are pathetic liars.

  • Chris - 2010-06-25 09:45

    LOL they had to pay FIFA somehow

  • mike turner - 2010-06-25 09:46

    And of course this has absolutely nothing to do with the billions spent on new stadia, nothing at all............

  • kgotso - 2010-06-25 09:46

    I am tired of hearing the fact that the issue is "not of lack of finance, but that of management competence and skills," while we are seating at home with honours degrees and excellent financial management background. Why can't we be employed because we have skills, to assist the old timers in management. If there is enough funding, employ the much needed but sidelined experienced youth.

  • mark - 2010-06-25 09:50

    Isn't this then a problem of BEE? The BEE restrictions mean that many municipalities prefer not to hire people who are of the 'wrong skin colour', even if they have legacy skills?

  • janined - 2010-06-25 09:57

    Here we go again ....

  • martin albert - 2010-06-25 09:58

    This has to be because too much money is being spent on salaries for unproductive staff, SWC tickets & corruption - take your pick!

  • JOSY - 2010-06-25 10:06

    which projection are you writting about, from the 700 billion? there will be no money for constructions- goverment is still investigating corruptions of certain tender processes e.g "malema,bosasa,social grants",with information not forth coming and lack of resources it could take months if not years to conclude and hope that no corrupt actions have prevailed when we were still investigating the others, because that will take us extra time to do it also.

  • Just_another_Boer - 2010-06-25 10:11

    Kry vir julle...! / Go ask Zums or Malema for jobs !

  • Johnathan - 2010-06-25 10:12

    It's what you get when you kick out all the civil engineers from public service... Municipalities now have LESS civil engineers than they had during apartheid, when not much attention was given to infrastructure for black people. How can you expect to do about 8 times MORE work with half as many qualified people in service?

  • POI - 2010-06-25 10:15

    That is not all..... the government projects are mostly being appointed to companies who import from China, which means what they are going ahead with is not even benefitting the local industries, and putting even more strain on the local companies who are retrenching and on short time accross SA!!!! Not to mention the tendertrapeneurs!!!

  • Sam - 2010-06-25 10:40

    The amount of money being stolen from the public by the ANC and all its corrupt officials is finally started to show on the surface, it's impossible to conceal it any longer.

  • JJ - 2010-06-25 10:44

    @ Kgotso You are obviously not politically connected. Are you by any chance a Cope supporter. If yes, I have unfortunate news for you. You will have to get out there and create your own work, like white males are being forced to do. The good news is that it will make you stronger, cleverer and much more streetwise and competitive.

  • ppip - 2010-06-25 10:56

    Oh the lies News24 helps perpetuate! Last week it stated that after world cup NEW projects will curb job losses. Now which is it? Where can I apply for a job at News24. I will excell at writing for this site!

  • TJ - 2010-06-25 10:56

    Did the government ask the tenderpreneurs? They must be very upset!

  • Buddy - 2010-06-25 10:58

    I own a construction company, and out of 32 tenders submitted to the government, I have not received one of them, I went to the municipality to enquire about it, and I was told by a senior official, the reason why we did not receive the tender is due to the fact that I’m white, my BBEEE rating is at level 5 out of 200 people only 3 of us is white, I had to do what every other company had to do, I had to let 95% of my work force go, due to the fact that I’m white, and I’m happy to say due to government policies only 20 out of 189 people has found other jobs, they do not kill white people they kill their own people with their policies maybe someone should change it, maybe give us a free and fair chance to tender. BTW the most of the construction companies that got awarded the tenders, has been suspended for fraud, but that doesn’t help me allot as allot of people that use to work for me wants to come back, even if I cut their salaries, they are willing to work, but that is up to the Msunduzi municipality You guys hit us hard, and now all the professional contractors are sitting at homes, while the city goes to ruins, which can be seen by all.

  • Anon - 2010-06-25 11:14

    I was planning a scathing attack on BEE, racisim in the youth, discrimination, goverment debt and corruption. How government is running the country in to the ground and how too manny people are not thinking for themselves. But what is the point? We can all see it happening.

  • Qminati - 2010-06-25 11:14

    I don't think BEE or whatever else you choose to call it has anything to do with the current state of affairs. As a practicing civil engineer, I can tell you that the problem lies in government's procurement processes, which drag on for far to long thus invalidating tenders. One of the reasons for that is that each municipality / governenemt department dreams up their own criteria to evaluate tenders, which are always being challenged due to the competitiveness of the industry. Once a tender's validity expires or a tender is withdrawn, it cannot be put out to tender for at least six months. That basically has the effect of delaying things by six months, if not more.

  • Chris - 2010-06-25 12:22

    This what happens when BBBEE window dressing becomes reality just have a look at the idiot malemma.

  • Rick - 2010-06-25 15:49

    I remember listening to some or other idiot on radio 702 - he was giving an outline on BBBEE. He was the specialist from government. I remember the host asking him what exactly the cumbersome BBBEE stood for. After stammering and stuttering for a number of seconds, the BBBEE specialist admitted that, actually, he did not know what BBBEE stood for. Now I even knew what BBBEE stood for, and it was only just being implemented. The idiots running this country (and the white middle class in particular,into the ground) are specialists, but, at demolition. They are so arrogant, yet so incompetant, that it is absolutely no surprise to me to read the damning article above. We really are living through a fool's revolution.

  • Eugene - 2010-06-25 16:26

    This article proves nothing. Think for yourself. This is nothing more than panic mongering and weak speculation. Do a document with actual proof and evidence of what you are saying and stop playing to the fears of weakminded men too lazy to look around and add one and one! Government is a huge success you losers.

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