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Water and Sanitation Minister Gugile Nkwinti has called for construction practitioners to assist government in developing a viable model for the establishment of a state-owned and controlled construction bank and company.
Delivering the keynote address at the annual conference of the Black Business Council in the Built Environment (BBCBE), held at its head office in Johannesburg, Nkwinti said the development of a state-owned and controlled company, which would be 51% owned by government, would present massive economic opportunities.
“I want us to use that opportunity and make sure that construction companies like yours benefit. When we say we are going to construct something, we know there is 49% that’s floating – 30% set aside and 19% direct investment. You can play in the space, but I don’t know how. You can come with ideas on how to conceptualise that,” he said.
Nkwinti added that turning South Africa into a construction site would present a huge economic opportunity for black people, and a construction bank would go a long way towards empowering construction practitioners across the board.
Nkwinti said when he was appointed to his current portfolio, he discovered that the department had a construction unit – but there is no work for them. “There is a construction unit within water and sanitation that built all the dams during apartheid. It employs more than 2 900 people, but they are doing nothing and are getting paid.
“When I redeployed there in February, they were on strike. Among other things, they wanted a bonus and told the department that it is our fault [that there is no work for them] because we pulled them from construction sites. They have everything, including a manufacturing plant, in the Northern Cape,” he said, adding that this workforce could be properly put to work through a company.
Greg Mofokeng, the CEO of the BBCBE, said the organisation was fully behind the establishment of a state-controlled construction company but wanted it to only take on mega projects worth R2bn and above to avoid competing with smaller construction companies. “We do not want this company to be our competitor as we cannot be tendering against the state. The threshold must be higher.”
Mofokeng said BBCBE supported the idea of a state-owned construction bank similar to the Human Settlements Development Bank, launched last year by the department of human settlements, which amalgamated various housing finance institutions.
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